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Navigating tax controversy strategies amid IRS operational challenges

From Alice Tsvilikhovski, J.D., LL.M., Edison, N.J.; Marissa Lenius, J.D., Jacksonville, Fla.; and Kimberly Thomas, CPA, J.D., LL.M., Washington, D.C.

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Editor: Mo Bell-Jacobs, J.D.

Since early 2025, the IRS has experienced substantial workforce changes affecting critical service areas across the agency, including IT infrastructure, the Taxpayer Services Division, and the Taxpayer Advocate Service (TAS). The reduction of employees handling tasks ranging from the administrative (e.g., scanning mail) to the determinative (e.g., resolving appeals) is resulting in extended case resolution time frames. Meanwhile, automated penalty assessments proceed without individualized human review, and refund offsets and levy actions may occur due to processing delays that affect timely updating of taxpayer accounts. These changes create operational challenges for both taxpayers and practitioners working to resolve issues or obtain guidance.

The evolving landscape of IRS operations

Current workforce levels affect training capacity for new hires and have caused extended correspondence and return processing times, while the loss of experienced personnel lessens institutional knowledge across the organization. The IRS now relies more heavily on automated systems for various functions, with the Automated Collection System continuing to generate notices and enforcement actions based on programmatic criteria, while opportunities for case–specific review have decreased. Concurrently, structural changes, including the creation of a CEO position and transitions among executives and managers, with many positions filled on an acting basis, have created operational complexities.

Service disruptions, including the late 2025 government shutdown, have contributed to processing delays, though practitioners can maintain service delivery by using available resources. Electronic filing and automated tools, including IRS.gov, Where’s My Refund?, the IRS2go mobile application, online payment agreement options, and processing of electronically filed returns with direct deposit, typically remain operational during disruptions, while paper–based services experience interruptions. The Practitioner Priority Service (PPS) generally remains available for credentialed representatives during these periods, though wait times may increase (weblinks for these and other services described below are listed at the end of this item). Given these operational changes and evolving service delivery methods, tax professionals must adapt their case–management approach to achieve optimal outcomes for clients.

Optimizing digital tools and communication channels

Practitioners should prioritize electronic submission to the IRS whenever possible. The IRS processes electronically filed returns significantly faster than paper returns. The Document Upload Tool allows secure, rapid submission of examination and some notice responses, eliminating mail delays and providing confirmation of receipt. Practitioners should maintain redundant documentation, save confirmation numbers, capture screenshots of successful uploads, and keep local copies of all submissions. In addition to capturing screenshots of successful uploads, for a truly comprehensive approach, practitioners should mail a duplicate copy of any responses to the IRS.

When responding to the IRS by mail is the only option, using a designated private delivery service or the U.S. Postal Service, with tracking, ensures delivery confirmation (see Notice 2016–30 for a list of designated private delivery services). Maintain copies of any submission with proof of mailing. Given current processing volumes and system transitions, it may take extended periods before delivered mail is logged in to IRS systems. Follow–up calls to PPS to confirm receipt of submissions are recommended for any correspondence sent via mail. Practitioners should wait at least six weeks before calling, to allow time for processing of submissions. Practitioners should maintain delivery confirmation and follow up as needed to ensure proper recording.

Understanding which IRS channel to use for different issues becomes critical when resources are limited. TAS, despite workforce challenges, remains the most effective channel for cases involving economic hardship or systemic IRS failures. The IRS Stakeholder Liaison program is another possible resource for tax professionals; this division establishes relationships with practitioner and industry organizations, providing valuable information about IRS policies, practices, and procedures. Regional Stakeholder Liaison offices serve specific geographic areas, allowing practitioners to develop relationships with representatives familiar with local issues and challenges. For examination and collection disputes, strategically timing Appeals requests can expedite resolution. The Independent Office of Appeals maintains authority to settle cases, and Appeals officers have broader settlement authority than revenue agents. Appeals officers often face persistent backlogs and are eager to resolve cases, especially when presented competently by a well–prepared and respectful practitioner.

Effective communication strategies

Working with IRS personnel requires adapting communication styles to address varying experience levels. Practitioners should learn to “speak IRS” to resolve issues most efficiently. Become intimately familiar with the Internal Revenue Manual (IRM), which provides guidance to IRS employees on every action the agency can and cannot take. Be prepared to cite IRM provisions to IRS phone representatives, revenue officers, examining agents, and Appeals officers, since they all are bound by the IRM and will respect it just as much as the Internal Revenue Code. Maintain detailed logs of every IRS interaction, including date, time, employee badge number, the substance of the discussion, and follow–up requirements. This documentation supports penalty abatement requests, helps with statute–of–limitation expiration issues, and supports TAS intervention when necessary.

When calling the IRS, always take the callback option if it is provided. While long hold times are often inevitable, the IRS callback system typically works well, offering a return call within a specified time frame so you can avoid an extended wait on hold. For somewhat unusual or uncommon assistance requests, it may save time to ask the representative upfront if they are able to assist, prior to going through the power–of–attorney authentication process. Often, newer PPS employees are not trained on all IRS systems and will have limited abilities. Sometimes it is most efficient to simply call back in, hoping for a more experienced representative. Another option is encouraging the PPS representative to seek managerial assistance.

Written communications require particular attention to detail. There may be no opportunity for further clarification; thus, the first attempt needs to be exceptionally clear and complete. Include the taxpayer’s name, taxpayer identification number, address, tax form, and tax period on every page, as documents may be separated during processing. Use specific subject lines, and structure documents with clear headings. Always state the requested relief clearly in the opening paragraph and document heading. Structure communications using an “Issue,” “Facts,” “Law,” “Analysis,” and “Conclusion” format, mirroring IRS examination reports, to increase accurate administrative recordkeeping. Cite regulation sections and IRM provisions in full, as newer employees may not know where to look for authoritative guidance. Write at a basic comprehension level, define technical terms, and avoid jargon. IRS representatives’ sophistication and experience can range extensively, dictating the need for comprehensive explanation of the issue and the reason for the communication.

Remember that IRS employees are navigating the same operational challenges as practitioners. Maintaining professional courtesy and patience during interactions often leads to more productive outcomes.

Leveraging technology platforms

IRS online accounts for individuals, businesses, and tax professionals provide essential services without requiring phone contact. These platforms offer transcript access, balance checks, and document submission capabilities. All online accounts require ID.me authentication, and tax professionals must maintain strict separation of personal and professional credentials.

The IRS continues to deploy automated response technology, including voicebots and chatbots, to handle basic inquiries. Practitioners report mixed experiences with automated systems, but these systems can be useful for routine matters, providing general information and directing callers to appropriate resources. Complex issues, however, still require human interaction through traditional channels.

Secure Messaging represents another valuable tool, particularly with Appeals and some Examination functions. This system allows for secure and efficient document delivery without the file–size and security limitations that can impede smooth communication with IRS employees.

Looking forward

As the IRS continues adapting to operational challenges, tax professionals must remain flexible and proactive in their approach to controversy resolution. The combination of automated enforcement and limited human resources creates unique challenges. Success in this environment depends on leveraging available technology, maintaining comprehensive documentation, and building effective communication strategies that account for the agency’s ongoing limitations.

Essential tools and resources for tax professionals

Editor

Mo Bell-Jacobs, J.D., is a senior manager, Washington National Tax, with RSM US LLP and a member of the AICPA Tax Executive Committee.

For additional information about these items, contact Bell-Jacobs at Mo.Bell-Jacobs@rsmus.com.

Contributors are members of or associated with RSM US LLP.