The I.R.S. Is in a World of Pain

Before the U.S. federal government “shutdown,” back in , I ordered a batch of this year’s tax forms from the IRS. I like to file on paper, rather than electronically, in part because if we all did that we’d bring the IRS to its knees. But anyway… during the “shutdown” the IRS sent me a letter saying it had gotten my order but would not be able to fulfill it right away. Here we are in mid-February, three weeks after the “shutdown” ended, and I’m still waiting.

That’s just a superficial indication of the chaos that’s roiling the already-overtaxed (ha!) agency. Years of increasing responsibilities, budget cuts, blows to employee morale, and ever-more-dilapidated IT infrastructure (“profoundly archaic”, one recent report put it, and risking a “catastrophic systems collapse”) have taken their toll. Hiring freezes have led to a graying workforce that is retiring in droves. The “shutdown” was further insult to the injuries.

And that, in a year when the agency has had to change its rules and processes to deal with a new tax law and the most radically restructured tax forms in recent memory. That all requires employee retraining which was supposed to have been happening in the weeks leading up to tax filing season, that is, the time when the agency had to shut its doors and send its seasonal employees home.

Employees came back to their desks last month to find five million unsorted pieces of mail waiting for them. Taxpayers who tried to call the agency to resolve unpaid tax bills failed to reach a human voice 93.3% of the time and waited on the phone an average of over an hour and a half.

In other news…

  • The new federal income tax law that goes into effect this filing season was the usual slapdash exercise in political posturing and lobbyist pissing matches. Naturally a plethora of loopholes and shelters bubbled to the surface after the ooze settled. A set of tax law experts has made “an effort to supply the analysis and deliberation that should have accompanied the bill’s consideration and passage,“ and they conclude that “[m]any of the new changes fundamentally undermine the integrity of the tax code and allow well-advised taxpayers to game the new rules through strategic planning.” Details here: The Games They Will Play: Tax Games, Roadblocks, and Glitches Under the 2017 Tax Legislation
  • After all of the talk of tax cuts, Americans may be surprised at getting fewer, smaller, and later-to-arrive income tax refunds than they’re used to this year. While that’s not a very meaningful metric in the big scheme of things, it is something that can contribute to the degradation of taxpayer morale, as many taxpayers — subconsciously or merely short-sightedly — see their tax refund as a measure of how generous or costly the government is to them.
  • The usual stories about massively profitable companies like Netflix or Amazon not paying taxes (or indeed getting tax refunds) are also doing the rounds and eroding taxpayer morale this year.
  • Susanne Großmann of Pax Christi and Netzwerk Friedenssteuer attempted last week to appeal for a refund of 5% of her taxes, on conscientious objection to military taxation grounds.