The IRS is predicting that taxpayers will see a reduction in services resulting from recent budget cuts. This will mean delayed refunds and reduced correspondence with IRS customer service. According to Commissioner Koskinen, the IRS has no choice but to do with less.
Kevin Thompson CPA says “Taxpayers will be impacted in several ways:”
There will be more opportunities for identity theft. Delays in protective actions will give scammers, posing as IRS representatives and other criminals a better chance of stealing identities. Scammers have become much bolder in recent years and change their methods of cheating taxpayers frequently. “The Service has an extraordinary effort in identifying and processing identity theft. And it becomes really difficult to represent taxpayers that have reported identity theft because the IRS is unsure of just how deep the theft goes. I have had to represent identity theft and had my Power of Attorney (http://www.irs.gov/pub/irs-pdf/f2848.pdf) rejected until the taxpayer got on the phone and cleared the path for the agent to discuss this with me.” Thompson says “we are only beginning to peel back the layers of the onion of identity theft. The depth, breadth and width of just how far criminals will go to obtain that information is frightening.”
Delays in refunds. Taxpayers who file their returns by mail will have to wait a week longer than normal to receive their refunds. The commissioner refused to say whether or not e-filers would be effected so delays for those who file electronically are unknown. “Hey America, get your Billions back, will just have to wait. Sorry H&R Block.”
Correspondence will be slowed down. There will be fewer employees at the agency to answer mail sent in by taxpayers with questions or requests. “Now this is a HUGE problem” says Thompson. During a recent examination (in which we prevailed 100%, I might add!!), The IRS examiner informed me that correspondence is running 12-16 weeks for a reply. That’s 3-4 months yet collections is working on a 30 day notice. “We regularly have to help the IRS with its own internal communication too. It is daunting when a taxpayer receives continuing correspondence on a matter that we have already addressed. We regularly contact the IRS 2-3 times on the same matter just to stop the harassment of taxpayers.”
Less claims will be resolved. Taxpayers who are legitimately attempting to correct mistakes or claim hardships regarding their returns will have less of a chance of resolving their issues with the Taxpayer Advocate Service (TAS).
Calls will go unanswered. There will be even lower levels of telephone service than before which was not good to begin with. Callers will face extended wait times. Thompson says “we budget one hour for each inquiry just for waiting on the phone. This extra cost is borne by the taxpayer but with these constraints there is nothing else we can do.”
Agency shutdowns. Temporary shutdowns are on the horizon even though the Commissioner had wavered on saying yes to furloughs. He has said that the agency is planning at least one shutdown in the fiscal year although definite dates have not been announced. “The challenge with shutdowns” says Kevin Thompson CPA “is not only the days that the agency shuts down but it’s the starting and stopping on the cases in the system. We had a case last year that was referred to the TAS (http://www.irs.gov/Advocate) because it was halted during one of the multitude of shutdowns and each time reassigned to a new desk. I kept telling the taxpayer you don’t owe this money but after a while they question your direction just because they keep getting conflicting direction from the IRS.”
Fewer taxpayer audits will be closed. Due to a reduction in staffing, the IRS will be unable to close many pending audits in 2015. This will also affect collections case closures. Although this will be happy news to those who are under the audit gun, it will be bad news for the Treasury. Thompson says “depending on the circumstances, the delays might be a good thing. I have found when a case lingers that it can often result in improved results for the taxpayer. It definitely tests your patience but most often works out.”
Reductions that will undermine the ability of the IRS to do its job more efficiently are not disastrous but will certainly make it much more inconvenient and frustrating for both taxpayers and tax preparers. 2015 may be the worst tax season ever. Get ready for it. “Listen to me, the bottom line, the silver lining if you will, here is the IRS will have to examine less returns. That’s music to my ears.”
Do you want to avoid many of the headaches of dealing with IRS issues this tax season?
Contact Kevin Thompson CPA
email@example.com or call him @ (310) 450-4625 x102.