Why Did the IRS create the Taxpayer Experience Office?

The announcement of the new office comes in the wake of a report to Congress from the National Taxpayer Advocate, released in January. The report details the processing issues that led to dramatic backlogs and refund delays from the 2020 tax season and warns that the outlook for the 2022 filing season is not good. To quote the report: “The IRS is in crisis.”

The IRS’s report to Congress, issued the same month, proposed over a hundred different new programs and tools to improve service issues. The Taxpayer Experience Office is a part of that plan. 

“As the IRS continues taking immediate steps this filing season, including adding more employees to address the significant challenges facing a resource-constrained IRS, it’s critical that we work to equip the IRS to be a 21st-century resource for Americans,” said IRS Commissioner Chuck Rettig. “The formal establishment of this office will help unify and expand efforts across the IRS to improve service to taxpayers.”

The TEO will identify changing taxpayer expectations and industry trends, focus on customer service best practices, and promote a consistent voice and experience across all taxpayer segments by developing agency-wide taxpayer experience guidelines and expectations. The office will be adding staff in the coming months to help support the effort.

“Whether checking the status of a tax return, meeting with a revenue agent for an audit, or receiving a tax credit to their bank account, improving service delivery and customer experience are fundamental priorities for us,” Corbin said. “We’re committed to designing and delivering services that better connect with our diverse taxpayer base.”

Some of the areas of improvement in the near term include expanding customer callback, expanded e-File and payment options, digital signatures, secure two-way messaging, online accounts for business and tax professionals, and more services for multilingual customers. 

What Other Service Improvements Has the IRS Made?

The improvements promised in the new initiative build on other recent innovations, such as digital tools to support Economic Impact Payments and the Advance Child Tax Credit, online chat, and online tax professional accounts.

The Documentation Upload Tool, which helps taxpayers more efficiently submit documentation to substantiate their claims, is another result of the IRS working to move into the 21st century since the pandemic. The tool allows taxpayers to take a picture of acceptable forms of substantiating documentation and upload the image — at which point the IRS can access the data and continue to make progress on the case. The data enters a database that the tax examiner can access and view, almost in real-time.

Another recent change: a new tool within the IRS Integrated Enterprise Portal, the cloud-based platform used for the official IRS website and other major applications, such as Where’s My Refund and Get Transcript. New features and customized interfaces are planned for this tool over time.

Will the Taxpayer Experience Office Impact Refunds This Year?

During the 2022 tax filing season, which commenced on January 24th, the IRS expected to receive 160.7 million individual returns for 2021. 

However, as of January 28th, 23.7 million backlogged returns were still awaiting action (a typical backlog in pre-pandemic years was roughly one million returns). 

So, how did they do? 

Although there was a modest improvement over last year (by April, the agency had processed 3.8% more returns than at the same time the previous year), continued staffing shortages have continued to hamper processing timelines. 

As of the beginning of May, 9.8 million individual returns, including returns received before 2022, remained unprocessed. (Commissioner Rettig has vowed to hire 10,000 additional workers to clear the backlog entirely by the end of 2022.)

Will the Taxpayer Experience Office help?

The new office was announced in March, before the April 18th deadline for most taxpayers. However, the degree to which it will expedite delays and reduce service issues during this filing season remains to be seen.

If all goes as planned, taxpayers will start seeing improved responsiveness and correspondence from the IRS this year and new digital tools and functionality. 

However, the most impactful changes are likely to be noticed during next year’s tax filing season, when the backlog will hopefully be cleared, and the TEO will have had time to implement changes. 

What Does the IRS Have Planned for the Future

Over the next five years, the IRS plans to focus on several key activities the TEO has identified. These include: 

  • Easing the payment of taxes
  • Providing the option to schedule customer support telephone callbacks
  • Expanding automatic direct deposit refunds based on tax returns from prior years
  • Providing tax credit eligibility tools
  • Expanding electronic filing options

Ken Corbin, the IRS Wage and Investment Commissioner, has taken on an additional role in leading the effort to improve taxpayer services as Chief Taxpayer Experience Officer. In discussing the TEO’s five-year focus, Corbin said, “the IRS is committed to customer experiences that meet taxpayers where they are, in the moments that matter most in people’s lives, and in a way that delivers the service that the public expects and deserves.”

In addition, the IRS is also seeking to automate the processing of paper tax returns, asking experts for information on performing “a complete digital intake for all incoming mail.” It’s no small task; the IRS receives over 100 million pieces of mail each year. 

Ultimately, as Commissioner Rettig told the Senate Appropriation Committee’s subcommittee on financial services and general government, the IRS plans to move towards being able to automate paper returns. 

The National Taxpayer Advocate service recently called paper the IRS’s “kryptonite,” so this may be one of the most effective steps. 

In closing…

Although the IRS has yet to clear the mountain of backlogged returns, and the 2022 tax season was not without substantial taxpayer service issues… The unveiling of the Taxpayer Experience Office, combined with the other improvements they have made and plan to make in the future, indicates that a serious effort is underway to resolve the agency’s persistent troubles.

However, the tax code will always be complex, and filing one’s tax returns is never straightforward. As always, our team of experienced, dedicated experts stands ready to answer your questions and offer any assistance you may need.

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