Wednesday, January 21, 2015

IRS Services Cut Again

IRS again is experiencing budget cuts this year, $346 million this fiscal year.  This is also the first year of many of the ObamaCare tax return provisions including the penalty for not having insurance and the reconciliation of the Premium Tax Credit.  This means IRS is expected to do more with less money.

As a result of having to shift resources IRS Commissioner John Koskinen has announced the following:
1) Fewer audit and collection cases.  Reduced staffing in enforcement will result in at least 46,000 fewer individual and business audit closures and more than 280,000 fewer Automated Collection System and Field Collection case closures.

2) Hiring freeze.  Lose about 1,800 enforcement personnel through attrition.  The result of these two items is expected to cost the government at least $2 billion in revenue that would have been collected.

In National Taxpayer Advocate Nina Olson’s annual report she said IRS expectations include:
1) IRS is unlikely to answer even half of the telephone calls it receives.

2) Taxpayers who manage to get through are expected to wait on hold for 30 minutes on average and considerably longer at peak times.

3) IRS will answer far fewer tax-law questions than in past years.  During the upcoming filing season, it will not answer any tax-law questions except “basic” ones.  After the filing season, it will not answer any tax-law questions at all, leaving the roughly 15 million taxpayers who file later in the year unable to get answers to their questions by calling or visiting IRS offices.

4) Tax return preparation assistance has been eliminated.

The above changes may be an opportunity or a headache for tax professionals.  With IRS doing less, taxpayers will be looking elsewhere for help.  They will be looking for free tax information.  This could be an opportunity for you to convert them to clients by helping them.  You also could refuse to take their calls and permanently turn them off from using your services if they ever felt the need.  This is a tricky situation for you as a tax professional and you will have to decide how to handle the extra calls that are bound to come in.

IRS e-help Desk is also decreasing its hours.  A posting on on January 15, 2015, states the e-help desk will NOT be open extended hours, Saturdays, Martin Luther King Jr. Day (January 19, 2015) or President’s Day (February 16, 2015) this year.  The hours for the e-help desk are Monday-Friday 6:30 am – 6:00 pm, Central Time for the entire year.

This text has been shared with you courtesy of:  David & Mary Mellem, EAs & Ashwaubenon Tax Professionals, 920-496-1065 (920-496-9111).

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