National taxpayer advocate says taxpayers need to make an 'investment' in the IRS

An arm of the IRS concerned with taxpayer rights is recommending that taxpayers fork over more money to the IRS, so it can do a better job answering taxpayer phone calls and helping people file their tax forms.

National Taxpayer Advocate Nina Olson released her 2014 report to Congress on Wednesday, and it warned that taxpayers will receive "the worst levels of taxpayer service since at least 2001." She said reduced trust due to the IRS targeting scandal has led to budget cuts, which in turn will mean many of the services the IRS provides will be reduced.

A new report says taxpayers need to make an 'investment' in the IRS to receive better service. Photo Credit: Shutterstock

Olson acknowledged that the IRS is the cause of the problems that led to funding cuts, but said Americans nonetheless need to fund the unpopular federal agency.

"The IRS will never be a beloved federal agency, because it is the face of the government's power to tax and collect. But it should be a respected government agency," she wrote in an executive summary of the report.

"Congress must simultaneously make an investment in the IRS and hold it accountable for how it applies that investment," she added. The report did not say how much of an investment is needed.

Among other things, Olson warned that taxpayers will likely wait an average of 30 minutes this year if they call the IRS for help, and that more than half of all calls to the IRS are unlikely to be answered. This will hurt tax compliance, she wrote.

“Taxpayers who need help are not getting it, and tax compliance is likely to suffer over the longer term if these problems are not quickly and decisively addressed,” Olson wrote.

Her report was released at a time when many congressional Republicans support deeper cuts to the IRS, especially after the IRS admitted to putting conservative groups through the ringer if they were seeking tax-exempt status. The enforcement budget for the IRS was cut by $340 million in the current year, after the House initially recommended a cut of more than $1 billion.

But Olson said those cuts will only hurt taxpayer services.

“Like any agency, the IRS can operate more effectively and efficiently in certain areas,” she wrote. "However, we do not see any substitute for sufficient personnel if high-quality taxpayer service is to be provided."

The National Taxpayer Advocate says it is an independent arm of the IRS.