WASHINGTON — A record shutdown of the United States government resulted in a “shocking” number of taxpayers’ calls to the Internal Revenue Service going unreturned or being left to languish on hold for unusually long periods, according to a government audit released on Tuesday.
The audit, by the office of the National Taxpayer Advocate, shows that when thousands of agency employees furloughed during the shutdown returned to work after more than a month away, they found over five million pieces of unanswered mail and 87,000 amended tax returns waiting to be processed.
The issues were especially acute since they followed significant changes to the tax code that left many people with questions about filing their returns.
The problems continued even after the shutdown, the audit found. In the week that ended Feb. 2, shortly after agency employees returned to their jobs, less than half of the calls to the I.R.S.’s accounts-management lines were answered, compared with nearly 90 percent during the same week last year. The typical hold time for such callers increased to 17 minutes from 4 minutes in 2018.
There were similar frustrations for those who called the agency’s so-called balance-due line in hopes of making payment arrangements. Fewer than 7 percent of such calls were answered, and the typical wait for those that were stretched to more than 80 minutes.
The audit did not focus solely on the shutdown’s impact. More broadly, it reflected an effort by the taxpayer advocate’s office, which is led by Nina E. Olson, to capture the typical experience that taxpayers have when dealing with I.R.S. The audit said that many Americans’ feelings about the process can be boiled down to two words: “extreme frustration.”
The audit found that a policy change made by the Trump administration that was ostensibly meant to simplify the tax-filing process — the creation of a “postcard size” 1040 form that does not include much of the information many taxpayers need to complete their returns — has instead made it more difficult.
“The new schedules will force some taxpayers to cross-reference and transfer data such as credits, deductions, and income, increasing the potential for errors to occur since the tax information is dispersed over many pages and needs to be tracked down and reported on different schedules and forms,” the report says.
The problems that became apparent during the 35-day shutdown, which ended Jan. 25, underscored some of the agency’s deeper flaws, including a reliance on 1960s-era technology, the audit found. The systems that contain the official record of taxpayer accounts are the oldest in the federal government. “For the last 25 years the I.R.S. has tried — and been unable — to replace them,” the audit says.
The outdated systems deprive the I.R.S. of a bird’s-eye view of taxpayers’ accounts, hampering the agency’s ability to properly identify who should be targeted for outreach, collections and audits.
Inadequate financing is a primary cause of the agency’s failings, the audit found. In general, Congress loves to hate the I.R.S., routinely condemning its performance while cutting its budget. From fiscal 2017 to fiscal 2018, for example, money for improvements was reduced 62 percent, to $110 million.
Taxpayers who called the I.R.S. last fall for advice about how they would affected by the new tax law were frequently told that there was “no tax law personnel at this time due to budgetary cuts,” and disconnected, the audit found. Part of the reason was a decision by the agency to answer tax law questions only during the three and a half months from January until tax filing day.
The problem has been compounded by the I.R.S. chief counsel’s office issuing fewer and fewer guidelines, despite the widespread ambiguity and confusion created by the tax code overhaul.
A lack of information has also meant that the vast majority of taxpayers eligible to use free software to file their returns electronically do not take advantage of the program. Of the 106 million taxpayers who could qualify for the free program, fewer than 2.5 million use it.