Don't Mess With Taxes

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One of the biggest, most persistent complaints about the Internal Revenue Service is the agency’s service, or lack thereof, in answering taxpayer phone calls.

The IRS has improved in this area, according to the National Taxpayer Advocate’s midyear report to Congress released today.

The Treasury Department and the IRS established the Accounts Management (AM) Customer Service Representative Level of Service (LOS) standard to measure taxpayer service. For the past two filing seasons, notes National Taxpayer Advocate (NTA) Erin M. Collins in her report, the Treasury/IRS LOS goal of at least 85 percent was met. In fact, this year the IRS achieved an 88 percent LOS.

But that measurement, added Collins, is a misleading one that actually has resulted in the IRS making poor resource allocations.

“In my opinion, the AM LOS measure has taken on outsized importance in recent years, as the IRS has allocated resources to hit ambitious but arbitrary goals that mean less than meets the eye and that consequently have required the IRS to neglect calls to non-AM telephone lines and workstreams like paper correspondence that I believe should receive higher priority,” Collins wrote.

The National Taxpayer Advocate's recommendation? “The measure is causing the IRS to prioritize the wrong work, and it needs to be replaced," wrote Collins.

Misleading phone response level: Collins said a major problem with the LOS measurement is that it leaves many observers with the impression that IRS employees answered 88 percent of taxpayer calls.

In fact, IRS employees last year answered only 31 percent of taxpayer calls, according to the Taxpayer Advocate’s calculations.

Collins elaborated —

During the 2024 filing season, the IRS routed about 10.3 million calls to AM employees, and they answered about 9 million, producing an LOS of 88 percent. But for context, the IRS received about 39.9 million calls.

Therefore, the 10.3 million calls included in the AM LOS calculation represented just over 25 percent of the calls the IRS received. The other 75 percent consisted of calls routed to non-AM telephone lines, calls in which the taxpayer disconnected before being placed in a calling queue, and calls routed for automated responses.

   
Overstaffing issues: In addition, the report notes that to reach the 85 percent AM LOS level, the overstaffs AM telephone lines to ensure there are enough employees to handle peak call periods. That tactic, however, backfires, according to the NTA report.

During quiet periods, AM employees are “sitting around waiting for the phone to ring,” according to the NTA report. Specifically, says the report, AM employees spent 1.1 million hours (29 percent of their time) during the 2024 filing season waiting to receive calls.

Worse, other priority work is neglected. Those hours waiting for calls represented “unproductive employee time that could have been spent processing taxpayer correspondence and amended returns,” as well as resolving identity theft victims’ assistance cases.

Wrong AM categorization: Collins said the IRS also classifies many of its telephone lines as Accounts Management (AM) lines, but excludes many of its telephone lines from the AM calculation.

In contrast to the LOS of 88 percent on the AM lines, the LOS on non-AM lines was 36 percent during the filing season.

She found that callers to non-AM telephone lines who received substantially lower levels of service included —

• 3.7 million taxpayers who called the Installment Agreement/Balance Due line to make payment arrangements or otherwise resolve their tax debts (42 percent of calls were answered with a 23-minute wait time);
• 3 million taxpayers who called the Taxpayer Protection Program telephone line because IRS filters had suspended the processing of their returns on suspicion of identity theft, and they needed to authenticate their identities to receive their refunds (16% of calls were answered with a 20-minute wait time); and
• 2.1 million taxpayers who called the IRS’ Automated Collection System telephone line after receiving a collection notice and who may have needed urgent help getting a levy released to alleviate an economic hardship (19% of calls were answered with a 10-minute wait time).

“One would expect a caller facing eviction because an IRS levy is leaving her unable to pay her rent would receive priority over a caller requesting an account transcript,” Collins said in the report. “But because the IRS’s benchmark LOS measure is based solely on the percentage of calls it answers on the AM telephone lines, the agency places a lower priority on calls that don’t factor into the benchmark LOS calculation.”

Instead, Collins recommends that the IRS not lose sight of what generally drives taxpayers calls to the agency.

“We need to keep in mind that backlogs in processing tax returns and taxpayer correspondence drive much of the phone volume,” Collins wrote. “For the 2025 filing season, I encourage the IRS to prioritize reducing its paper processing backlog, even if that means somewhat reducing the telephone LOS, especially given the inaccurate and misleading picture the LOS paints.”

You also might find these items of interest:

• Tax ID theft victims waiting 2 years for refunds
• After initial progress, IRS slips in processing paper tax filings
• 10 most serious taxpayer problems, according to the National Taxpayer Advocate

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