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Taxpayer Advocate Suggests Tech Solutions for IRS Support

The National Taxpayer Advocate Nina Olson may be retiring at the end of July, but according to a recent IRS press release, she had to issue one final report to Congress before riding off into the sunset. As with many previous reports, Olson renewed the call for better customer service—and she says that automated services might be a solution.

Why does the IRS have a customer service problem?

One reason the IRS is unable to provide top-notch customer service is its budget. Back in April, NPR reported that trend started shortly after Republicans took control of the House in 2010: “Adjusted for inflation, IRS funding has been cut by about 25 percent.” Unfortunately, some of these budget-related wounds are self-inflicted.

According to Olson, IRS leadership decided to cut part of its own funding this year: “While the Administration’s budget proposal for fiscal year (FY) 2020 requested an increase of 5.0 percent for enforcement, it requested a decrease of 6.6 percent in taxpayer services funding.” The result? The IRS will have fewer people to answer phones and more people dedicated to conducting audits.

Just how has IRS customer service fared since? Olson highlighted two particularly damaging data points from the 2019 filing season:

  • The IRS only answered 25 percent of all incoming calls
  • Taxpayers had to wait an average of 13 minutes when they called the IRS
  • That begs the question: What can the IRS do to improve customer service when Congress and agency leadership propose cuts to taxpayer services funding?

    How will the IRS improve its customer service?

    Olson said that the IRS should begin adopting more “self-assistance services”—like automated calls and web services—to close customer service gaps. After all, it’s extremely unlikely that America’s tax collectors are going to see their budget increase by that lost 25 percent anytime soon. But how will the IRS know which services it can automate?

    Research found that people are more likely to use automated services when they aren’t anxious: “This observation has led me to develop what I call the Taxpayer Anxiety Index as a methodology for analyzing how the IRS should structure its interactions with the taxpayer. Simply put, as the anxiety-inducing capacity of a given interaction increases, so should the taxpayer’s access to person-to-person interaction.”

    If the IRS can accurately predict when taxpayers would prefer self-service, callers could be navigating phone trees sooner than later. Will these systems be successful? Only time will tell.

    Sources: IR-2019-119; NPR

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