By Alex Fabian, PICPA manager of government relations
The Inflation Reduction Act of 2022 – signed by President Joe Biden on Aug. 16, 2022 – includes significant increases in funding for the IRS. The $430 billion package appropriates
about $80 billion over the next decade for IRS activities, including the hiring and training of new auditors, technology systems modernization, and taxpayer services.
In an Aug. 16 statement, then IRS Commissioner Charles P.
Rettig stated, “The signing of the historic reconciliation package marks a transformational moment for our agency – and an opportunity for the future of tax administration. ... During the next 10 years, these funds will help us in many
areas, including adding critical resources to not just close the tax gap but meaningfully improve taxpayer service and technology. This will allow the IRS to provide services to taxpayers in the manner they expect and deserve.”
On a recent call with Richard Furlong, IRS senior stakeholder liaison, the PICPA and representatives from Pennsylvania’s tax and business community discussed the state of the IRS and enhancements that will be made as a result of the
additional funding.
As of mid-September, the IRS had 7 million unprocessed returns, most of which are paper. About 1.6 million of them, Furlong explained, will likely require error resolution, slowing the processing. The IRS,
however, will provide frequent updates to taxpayers via its IRS Operations During COVID-19 hub,
1 which is updated weekly. Furlong urged taxpayers to check this website as a first point of action.
Long wait times, dropped
calls, and an inability to reach IRS call agents were chronic during the pandemic, greatly inhibiting the ability of practitioners to resolve important tax matters. Furlong touched on this and the IRS’s plan to improve customer service. With
the additional funding, the IRS plans to hire new call agents. Furlong said, “Our long-term goal is to get enough phone assisters to get to prepandemic levels in which 75% of calls go through on the first try.” Furlong and his colleagues
are asking practitioners to provide feedback on the customer service they receive. At a minimum, practitioners should take down the phone assister’s name, badge number, and the time called. Feedback can be shared with
PICPA’s Government Relations team. The IRS wants to know practitioners’ experiences with call agents or if they are subjected to a dropped call.
An additional best
practice when calling the IRS includes having an “elevator speech” ready. Furlong explained that having a high-level, concise summary at the beginning of a call is extremely helpful to call agents. Furlong also stressed that taxpayers
are encouraged to sign up for online accounts and to handle tasks via the online portal when possible. These steps will help streamline interactions and assist the IRS in restoring service to prepandemic levels.
Another topic
discussed was extending the filing deadline to provide taxpayers relief from pandemic-related issues. The PICPA has been engaged in this effort and urged members of the Pennsylvania congressional delegation to sign on to a letter led by U.S. Senate
Finance Committee Ranking Member Mike Crapo (R-Idaho) and U.S. House Ways and Means Committee Ranking Member Kevin Brady (R-Texas). The bicameral letter urged Assistant Treasury Secretary for Tax Policy Lily Batchelder and now former IRS Commissioner
Rettig to extend the COVID-19-related penalty deadline, as taxpayers continue to face IRS customer service challenges. The following supported this effort: Sen. Pat Toomey (R), Rep. Mike Kelly (R), and Rep. Lloyd Smucker (R).
The letter states, “We have heard from both constituents and also large segments of the tax professional community that the deadline is simply too soon for some taxpayers. The Notice only provided 36 days (5 weeks) for self-filers and practitioners
to check their records and file any outstanding 2019 and 2020 tax returns. We therefore urge IRS to extend the Notice 2022-36 relief deadline to provide taxpayers, practitioners, and IRS more time to benefit from the relief, increase voluntary compliance,
further reduce the IRS correspondence and paper return processing backlog, and help taxpayers who continue to feel the effects of the IRS’s customer service challenges.”
2 The PICPA is committed to partnering
with our congressional delegation and IRS agency staff to help improve the service issues created by the pandemic. Regarding the Inflation Reduction Act funding, Furlong did caution that, “Things are gearing up internally to implement this,
but it’s not going to happen overnight. With $80 billion allocated to the IRS, there is enormous responsibility to deploy the money effectively.”
There is a long road ahead for the IRS and the accounting community as we
continue to transition to post-pandemic life, but there is light at the end of the tunnel. Moving into 2023, the IRS stakeholder liaison plans to hold monthly Issue Management Resolution System meetings and quarterly calls with key partners in Pennsylvania.
The PICPA is thankful to be included in these efforts and looks forward to a continuing dialogue with the IRS in 2023 and beyond.
1 www.irs.gov/newsroom/irs-operations-during-covid-19-mission-critical-functions-continue
2 www.finance.senate.gov/imo/media/doc/joint_letter_to_irs_and_treasury.pdf