Central to Americans’ confidence in our government is their confidence in our tax-collection system. Unfortunately, the Internal Revenue Service has not always earned that trust, undermining this system of voluntary compliance and taxpayer engagement. Fortunately, this has been a bipartisan issue in the past, and we believe a bipartisan proposal exists to once again solve the problem and make the agency more responsive and accountable to taxpayers.
Based on recent testimony before a congressional committee, IRS technology is outdated and the Taxpayer Advocate estimates that only 29 percent of the telephone calls to the IRS are answered.
About 20 years ago the IRS had similar difficulties. Calls went unanswered by the thousands, and calls that were answered often were incorrect or unhelpful.
Due to a lack of leadership and strategic direction, the billions of dollars that Congress poured into the IRS computer systems were largely wasted.
The American public had lost faith in the IRS, and sweeping changes were needed to get it back on track. As a result, Congress created the National Commission on Restructuring the IRS.
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We co-chaired that IRS commission, and we convened some of the best and brightest minds across industries and political parties to work with us on restructuring the IRS to better serve taxpayers. We published our findings and recommendations in a comprehensive report, which served as the basis for the IRS Restructuring and Reform Act of 1998, the first major overhaul the agency had undergone in 40 years.
The law created dozens of new taxpayer rights, including the right to an independent appeal of an IRS decision. It restructured how the IRS was governed, by establishing an independent IRS Oversight Board to add needed experience, expertise and continuity to review and approve the agency’s budget requests and strategic direction. It also refocused the IRS’s long-term customer service and IT modernization strategies to better serve the basic needs of taxpayers.
For a number of years following those reforms, there were substantial improvements at the IRS. The percentage of taxpayer calls that it answered was up from 52 percent in 1997 to 83 percent in 2007, according to the IRS. That same year, the IRS hit another goal by reaching a rate of 80 percent of taxpayers filing electronically. Customer opinion surveys showed that the IRS had moved from the bottom to the middle ranks of government agencies. The general consensus was that the 1998 IRS reform law was a success.
Unfortunately, that period of sustained improvement at the IRS has unraveled in recent years. For example, according to the Taxpayer Advocate, the percentage of calls that the IRS answered bottomed out at a staggeringly low 15 percent in 2015. In addition, nearly 40 percent of taxpayers that called the IRS in 2017 felt they were not able to resolve their issues with just one call.
Moreover, despite the efforts 20 years ago to include an independent appeal of a decision, appeals have declined because the IRS has chosen to settle more cases in tax court — at a higher cost to taxpayers. Finally, while the 1998 law intended the IRS Oversight Board to help set long-term strategic goals for the IRS, the goals stopped being met, and by the end of 2015, the board had failed to maintain enough members and has been shut down.
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