To claim that the Internal Revenue Service continues to have an image problem is an understatement. From wage garnishment to criminal prosecution, the nation’s tax agency is best known for their enforcement actions.
Nina Olson of the National Taxpayer Advocate believes that the IRS should shift its focus. The agency should focus on taxpayers who are trying to comply, not those that are actively trying not to.
The Challenges Of Changing Taxpayer’s Perceptions
Turning around negative perceptions requires a change in culture that encourages taxpayer trust and confidence. A report from the independent IRS office asserts that the nation’s tax agency should move the needle more towards customer service and taxpayer rights.
Currently, the IRS devotes half of its $11.2 million budget to audits and enforcement. Taxpayer outreach and education accounts for 6%, a fraction of the total appropriation.
Service quality is on a downward trend. In 2015, IRS employees answered 38% of phone calls from taxpayers, down from 53% the previous year. Those who managed to get through were on hold 30 minutes and 18 minutes respectively in those years.
Which Comes First? The Service Or The Enforcement?
An enforcement-oriented tax agency is still needed, according to Olson in her report before Congress. However, the current culture does not provide the help taxpayers need. Many trying to comply after discovering mistakes are treated as tax evaders. The IRS’s current approach to “service” creates resentment, turning a willingness to comply into outright noncompliance.
Perhaps the best example of the need for change in the report comes from the vignettes created by all four IRS operating divisions. When asked to show how future services would operate, each presentation started with the IRS contacting a taxpayer to conduct an audit or challenge a tax return.