Tuesday, September 12, 2006

"Gentlemen's 'C'" for IRS Taxpayer Assistance Centers

A report from the Inspector General for Tax Administration of the U.S. Treasury found that taxpayer assistance was correct 70-75% of the time when undercover agents raised questions. In two separate experiments, auditors developed 47 scenarios with 200 questions and surveyed 50 TAC offices. An additional ten scenarios totalling 80 questions were asked regarding the Katrina Emergency Relief Act and posed at 20 different TACs. For the general tax questions, 72-73% were answered correctly, 15% incorrectly and on 13% of questions the assistors were unable to answer the question and had to refer the questioner to alternate IRS sources. For Katrina topics, the assistors were right on 75%, wrong on 7-8% and unable to answer 17-18%. Contributing factors for errors/unable to answers included failure to use available tax tools, large number of questions asked and complexity of tax law. A seperate criticism of the Inspector General was poor quality of assistance given to taxpayers who were making payments. Average wait time was over 20 minutes and one set of taxpayers were turned away completely so the facility could close at a specific time. The IRS indicated willingness to improve both facets.

One of the continuing disappointments with the IRS is that the agency has not clearly owned accountability in cases where tax advice has been poor. The willingness to improve is good, I suppose, but is there any REAL consequences if this sort of result occurs again two years from now? Moreover, is there real protection for taxpayers if they follow bad IRS advice and end up on the wrong side of an audit?


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