In her mid-year report, IRS Taxpayer Advocate, Erin Collins, identified three crucial areas where the IRS needs improvement to facilitate smoother and more efficient processing of returns. First, Ms. Collins emphasized how delays in resolving cases of identity theft have negatively affected victims. In 2023, it took the IRS an average of 19 months to identify which returns were legitimate, but now the average has jumped to 22 months. Given that 69% of taxpayers involved in these cases are at or below 250% of the Federal Poverty Level, it is crucial that they receive their refunds in a timely manner to pay their daily expenses.
Ms. Collins also emphasized how recent measures that concentrate on “Accounts Management (AM)” calls by measuring “Customer Service Representative Level of Service (LOS)” have misled where the IRS should be focusing. In 2024, 10.3 million calls were routed to AM employees, but approximately 39.9 million calls were received. With the IRS’ focus on wanting a higher LOS on AM lines, they have overstaffed AM lines and understaffed the others. Subsequentially, approximately 75% of individuals trying to resolve their crucial IRS problems are not as prioritized as those whose problems can be routed to AM.
Lastly, 1.4 million Employee Retention Credit (ERC) claims have been backlogged, leading to a delay in businesses receiving their refunds. Ms. Collins debated the balance between expeditiously issuing refunds and the importance of a proper review of these claims to ensure erroneous payments are not made by the IRS.
To read further about Ms. Collins’ recommendations and the Taxpayer Advocate Service’s objectives, click here.
