The National Taxpayer Advocate Service (TAS) 2016 Mid-Year Report was recently released, assessing this year’s filing season and sharing details about improvements over last year and suggestions for additional changes in the future when it comes to US taxes. The report focuses on four areas where the IRS has cut back or eliminated services, which we’ll recap in further detail below.
First Things First
To start off on a positive note, it was reported that the IRS has made improvements compared to last year, especially along the lines of improving its toll-free phone service. The percentage of calls answered nearly doubled this year and cut wait times by more than half – and that’s no small feat, as the IRS receives more than 100 million phone calls per year!
Most tax returns were received and processed in a timely manner, which led to more timely refunds to most taxpayers. This may be attributed to additional funding provided by Congress, which allowed the IRS to use their resources more effectively. The report encourages Congress to continue providing additional funding to the IRS as a way to provide the assistance taxpayers deserve for their US taxes.
The Not-So-Great News
Despite the positive achievements of this year’s tax filing season, there are still several key areas in which improvements could be made. Even despite the additional funding mentioned above, overall funding is down approximately 19 percent since 2010, which has led the IRS to scale down or eliminate four of its services.
Service at IRS Taxpayer Assistance Centers
- There are plans to cut walk-in service at the 375 centers across the nation, which serve over 5 million taxpayers each year. Instead, taxpayers will need to schedule appointments for help with their US taxes – which might frustrate those who might not know about the change or who may need help immediately. A pilot program testing this method found that 20 percent of participants waited from 13 to 41 days for an appointment – and 5 percent waited even longer. Also, the IRS reportedly refused to accept tax payments or returns at several centers this year.
Limited Tax-Law Question Assistance
- The IRS has continued to limit the answering of tax-law questions, opting to answer only those considered “basic.” Since the filing season has ended, the IRS isn’t answering any questions, even if taxpayers have legally approved filing extensions for their US taxes.
Identity Theft Screening
- The IRS’ Taxpayer Protection Program (TPP) screens tax returns that claim refunds for possible identity theft and requests filers to verify their identities before releasing refunds. There is a trend of a high false-positive rate for this program, and TAS had recommended the IRS adjust its filters on the program. However, the IRS has yet to do that, and the false-positive rate for the 2016 tax year was about the same as 2015’s – which meant honest taxpayers who had to prove their identity faced long wait times. These delays can be a mere inconvenience to some, but to others counting on their refund, can prove to be a big hardship. Additionally, the IRS received more than 4.4 million calls to the TPP phone line, but answered just 22.7 percent – nearly 4 out of 5 calls went unanswered.
Limited Service for US Expats
- Talk about an impact on Americans abroad! With 9 million US citizens living overseas and more than half a million non-citizens needing to file US taxes, service options for these groups continue to be low. They are not able to call US toll-free phone numbers and they no longer have tax offices for walk-in help. Also, the IRS eliminated a service that allowed tax-law questions to be handled by email. Many US expats already face additional challenges when filing US taxes, and the IRS continues to provide fewer options for this group, which is very unfortunate.
The remainder of TAS’ top priorities include topics that have an effect on US expats, such as FATCA, changes to the Individual Taxpayer Identification Number (ITIN) program, concerns with the Offshore Voluntary Disclosure Program as well as topics that affect US taxpayers more generally. The overarching goal of the TAS is to help shape laws within the IRS, to even the playing field for individual taxpayers and provide a voice to the average US taxpayer.
Have Specific Questions Related to US Taxes?
We can help! Our dedicated team of CPAs and IRS Enrolled Agents have specific expat tax expertise to help Americans abroad navigate their US taxes in a way that makes sense for their individual situation – contact us today.