Tax Byte

The IRS is killin’ it on the phones lately, have you heard? And by killin’ it, I mean answering calls at a level of 85 percent or higher — a goal set by Treasury Secretary Janet Yellen.

Good News: Last week I had the honor of speaking at the American Bar Association Section of Taxation Midyear Meeting in San Diego, and with the opportunity came some good news from Treasury Assistant Secretary for Tax Policy Lily Batchelder. During her keynote address, Batchelder stated that because of the IRS’s recent funding boost under the Inflation Reduction Act (P.L. 117-169), it has already seen significant improvements in taxpayer service since hiring 5,000 customer service agents.

Accordingly, during the first two weeks of the 2023 tax filing season, IRS representatives answered a whopping 89 percent of calls, Batchelder said. (I added the whopping part.) And when automated assistance was included, 93 percent of customer calls were answered, she added.

Got to give credit where credit is due — that’s a giant leap in progress compared to the 11-to-13 percent of calls it answered during the 2021 and 2022 filing seasons.

“The IRA provides us with a once-in-a-generation opportunity to modernize the IRS and bring one of our bedrock government institutions into the digital age,” Batchelder said. “For too long, the IRS has been mired in 1960s technology and hamstrung by budget cuts and budget uncertainty.”

The Catch: This exciting news may come with a catch, however. That’s usually how it goes, am I right?

Laura Baek, an attorney with the Taxpayer Advocate Service, also speaking at the ABA tax conference last week, appeared to offer some cautious optimism regarding the IRS’s improved phone service levels. While the IRS has made tremendous progress in this area, doing so means it had to have less employees focused on processing correspondence, according to Baek.

As you may remember, paper correspondence, which continues to add to the IRS’s ongoing backlog, is the IRS’s Achilles heel, according to National Taxpayer Advocate Erin M. Collins. “The IRS has this balancing act with the phones and correspondence…we’ll see how that works,” Baek said.