The tax system in the U.S. continues to grow in complexity. Recent examples include burdens placed by the Affordable Care Act and the Foreign Account Tax Compliance Act.
This comes at a time when the IRS has reduced staff and its training budget, the result of a budget that’s been cut by more than $1 billion since 2010.
The result: the IRS anticipates answering fewer than half of the calls it receives into its Q&A line.
This leads me to wonder why anyone would call the IRS instead of their tax professional. When I posed this question to Drew Murray, CPA, the COO of OnPoint Tax Advisors, he told me that it is the professional tax preparers making the calls to the IRS. While a few do-it-yourself individuals call the IRS with more basic questions, professionals – such as Drew – contact the IRS for guidance on complex tax matters or clarifications on certain tax compliance rulings. Drew indicated that given the anticipated delay in reaching the IRS hotline, reaching out to them is now a last resort.
It’s easy for Congress to continue dropping the IRS’s budget, but we cannot expect the IRS, or our country’s tax professionals, to do the job expected of them when they are unnecessarily restrained. The best response is tax reform that lowers rates while ending many exemptions and loopholes, which would simplify the Internal Revenue Code. Politicians have verbalized similar hopes in their stump speeches, but we have yet to see anything concrete. Let’s hope that changes at the start of a new Congress. Hope springs eternal.