Taxpayer advocate: IRS again fails tax pros with PPS call answer rate

The IRS’s improved metrics on answered phone calls do not account for all lines, and the Service’s performance again was particularly abysmal on the Practitioner Priority Service (PPS) line that CPAs and other tax professionals use, National Taxpayer Advocate Erin Collins said Wednesday in her annual report to Congress.

Overall, the IRS has returned to its “business as usual” level of service that it held before the pandemic wreaked havoc on the agency — causing it to close offices, amass a backlog of about 17 million paper-filed Forms 1040, and leave millions of calls unanswered — Collins said in her 2023 report.

“The bad news is that the baseline level of ‘business as usual’ was not good enough,” Collins wrote. “Our nation’s taxpayers deserve a 21st Century tax administration agency that is fair and equitable, provides timely and clear guidance, makes it possible for all taxpayers to electronically file their tax returns, answers its phones, and resolves most issues at the first point of contact, and allows taxpayers to conduct business on any follow-up matters through online accounts in the same way they conduct business with their financial institutions.”

The numbers the IRS cites — an 85% level of service in FY 2023 –– are accurate for what they cover, which is account management (AM) calls only, she said. But only 35% of callers reached an IRS employee during the 2023 filing season, and 29% reached an employee during the full fiscal year, she said.

The IRS numbers exclude taxpayer hang-ups and include only calls routed to the AM function, she wrote. But the Service routed almost one-quarter of its callers last year to compliance lines and other functions, where they often faced longer hold times and lower levels of service. And the IRS excludes from the level of service calculation the many calls that are automatically routed for automated responses.

It was harder to reach the PPS line than other lines, Collins wrote, which is especially damaging because practitioners often try to resolve issues for several taxpayers in one call. About 500,000 tax professionals prepare returns for over 85 million taxpayers, she noted.

“Requiring tax professionals to call back repeatedly and wait on hold not only inconveniences them but often results in additional costs to taxpayers for the time their tax professionals bill for waiting on hold,” she wrote. “The IRS should prioritize improving service on this phone line.”

By the numbers

The IRS received 92.9 million calls and answered 27.3 million for a 29% rate. On the PPS line, the Service received 6.7 million calls and answered 1.9 million for a 29% rate. Hold times were 13 minutes and 16 minutes, respectively.

The PPS line metrics were still better than what Collins provided in her 2022 report, when she said the telephone service for tax professionals reached an all-time low. Of the 12.7 million calls to the PPS line, the IRS answered 2 million — or 16% — with an average hold time of 25 minutes for those who did reach the agency.

The 2023 numbers uphold what tax practitioners told the JofA in August 2023, when they said it had become more difficult to reach the IRS on the PPS line after the agency ended its pilot program to thwart line-jumping companies at the end of March.

Collins listed the IRS’s inability to oversee return preparation as one of the most serious problems facing taxpayers. She recommended that Treasury and her office work together to promote legislation to provide this “much-needed preparer oversight” to the IRS since the courts have ruled that the IRS lacks this authority.

“The IRS’s inability to oversee return preparation places taxpayers and the tax system at risk,” she wrote. “The available data suggests that the most common bad actors in this industry are non-credentialed preparers. The IRS, however, is extremely limited in the tools it has at its disposal to regulate incompetent or dishonest preparers.”

Besides tax preparer oversight, the most serious problems for taxpayers listed by Collins are: processing delays; IRS hiring, recruitment, and training; IRS transparency; telephone and in-person service; identify theft; online account access for taxpayers and tax professionals; information return penalties related to foreign income and financial activities (an issue the AICPA has advocated on with the IRS); compliance challenges for taxpayers abroad; and appeals.

— To comment on this article or to suggest an idea for another article, contact Martha Waggoner at Martha.Waggoner@aicpa-cima.com.