Posts Tagged ‘Practitioner.Priority.Service’

Good, Bad, and Ugly With the IRS

Thursday, February 9th, 2023

This week I’ve had to call the IRS up for several different items.  There is good news, bad news, and some ugly news.

The good news: In calling the Practitioner Priority Service (PPS), I’ve gotten through every time!  Twice, there was no wait!  I was disconnected once after reaching an agent but I called back and was immediately connected to another agent.  For practitioners, this is great news and will make our lives easier in Tax Season.

The bad news: The IRS remains slow to respond to obvious issues.  For example, the California “Middle Class Tax Rebates” were announced last year.  California exempted them from state taxation (which is their right); how would they be treated for federal tax returns?  There were (and are) two schools of thought: these are taxable as an accession to wealth or these are not taxable based on the “General Welfare” theory.  A ruling from the IRS is due soon.  My suspicion is that the IRS will rule that these aren’t taxed–based on politics, not law.  (This isn’t just a California issue; several states enacted similar programs in 2022.)

The ugly news: Yesterday, I spoke with an IRS Appeals Officer on a case.  We didn’t agree completely on my client’s issues, but we did agree on where to go to move the case forward.  (Like almost everyone I have dealt with at the IRS, she was pleasant and helpful.)  So why am I putting this in “ugly news?”

The issue is her workload.  From everything I’ve seen, Appeals is buried (see below for another example of this).  She confirmed this, and noted that over the past three years the number of Appeals Officers has decreased to a point that she thinks it will take five years to rebuild the staffing.  (You can’t just hire effective Appeals Officers.)  I agree–it will be years before this and other Pandemic-related backlogs are resolved.

Speaking of backlogs, paper remains the IRS’s Achilles heal.  Here’s an example impacting a client of mine.  An individual self-represented for an audit.  That individual lost at the audit, hired me, and I requested an Appeals hearing by certified mail.  That request was received timely (we tracked the mailing), and we received a notification that the file was sent to an IRS office.  No matter, a Notice of Deficiency was issued so now my client must file a Tax Court petition because of an IRS error.  If this ever goes to Tax Court (which isn’t likely–filing the petition will cause the case to be assigned to Appeals), I doubt the court would look favorably at the IRS ignoring its own procedures.

Additionally, yesterday I needed a transcript for a client.  I went onto IRS E-Services to download it (I had an authorization sent to the IRS back in 2021) and it failed.  Why?  Who knows.  I show it was successfully faxed–but it went into the ether.

As I noted above, it’s going to take years for the IRS to work its way out of the backlog and staffing issues.  This isn’t just for Appeals, but for Exam (audit), collections, and all functions of the IRS.  If there’s a budget shutdown or anything else like that, this could delay things even more.

IRS: Don’t Call Us, Don’t Write Us

Thursday, December 8th, 2022

No, I’m not talking about my business: feel free to call or write us (but due to a water leak, our office is closed today, Thursday, December 8th–we’ll be in tomorrow).  Rather, I’m talking about calling the IRS and writing the IRS.

Let’s start with calling the IRS.  For tax professionals like me, we use the Practitioner Priority Service (PPS).  When we reach agents from the IRS, they can usually resolve issues, or direct us to the personnel at the IRS who can resolve our issues.  This is good for taxpayers and tax professionals.  Unfortunately, there’s a but in this: “When we reach agents from the IRS….”  The problem is reaching them.

On Tuesday, I had eight matters to resolve with the IRS (four business, four individual).  At 7am I began calling PPS (the service is open from 7am – 7pm local time).  I made 60 phone calls to PPS.  On all of them I received the message, “We’re sorry, but due to high call volume in the topic you’ve chosen we cannot take your call at the present time.  Good bye.”  On some of the calls, I also had to do simple math (add six and eight) or repeat words (a theoretical way to stop automated dialing).  All that did for me was make each call take more time to reach the “We’re sorry” message.  (I alternated attempting to reach the business and individual queues, and was equally unable to reach either.)

I am not alone in being frustrated.  The National Association of Enrolled Agents (NAEA) sent a letter to the IRS and Congress noting our frustration. One excerpt from the letter:

As you can see from the sentiments of enrolled agents across the country, accessing the PPS lines has become nearly impossible for tax professionals to gain the help they need from the IRS. We have received anecdotal evidence that less than one percent of callers can get through the PPS individual line.  [emphasis added]

Once we get through, we’re usually on hold for at least 30 minutes.  Sometimes the IRS will offer a callback option so I don’t have to listen to the IRS hold music for an hour.  I can work on other matters while on hold so I don’t have to charge clients for that time.  Still, the current phone system is untenable in allowing tax professionals to resolve issues.

I will be trying to call the IRS again tomorrow and we’ll see if there’s any improvement.

So, Russ, why not write the IRS letters to resolve matters?  When we write the IRS, it goes into the black hole of correspondence.  First, the average response time when we write the IRS is measured in months (three to six currently), so taxpayers have to wait longer for resolution.  Second, some of the time when we respond by mail the IRS repeats what was said in the original notice, ignoring the response; in those cases, we now have to send another letter to the IRS.  Third, the National Taxpayer Advocate correctly noted the IRS’s Achilles heal is correspondence.  The volume is so large that the IRS does lose items.  With a phone call, we have resolution (hopefully).

Some items must be responded to by mail.  For example, I have two clients who received erroneous “Math Error” notices.  The only way to challenge these notices is to write the IRS a letter.  (In one case, the IRS notice would be correct except for two amended returns that have not been processed.  In the other case, the IRS made the math error and miscalculated the client’s tax owed due to a tax treaty allowing for a favorable tax rate.)  Based on experience, it will be mid-2023 before these clients have resolution on these matters.

The IRS is supposedly based on providing quality service for taxpayers and tax professionals.  I do need to point out that when I reach IRS employees they almost always do provide a high level of service.  Unfortunately, reaching those employees is near impossible today.

PPS Gets Friendlier: Callbacks Available

Tuesday, December 15th, 2020

Twice a week, on average, I call the IRS’s Practitioner Priority Service. It’s the usual starting place for tax professionals to resolve issues with the IRS. This year, calling the IRS has been an adventure. This is not the IRS’s fault: Covid has played havoc with everyone. But getting through to the IRS for tax professionals has been an adventure: If I call after 9am PST I’m usually greeted by the message, “Due to extremely high call volumes we cannot complete your call at this time; please call back later. Goodbye.”

This morning, I called the IRS to resolve a client’s payment. He made a payment for 2019 taxes–and it shows on the IRS computer system. However, it has not made it to the client’s account; somehow the payment is stuck in limbo. When I called the IRS up I was greeted with something new and improved (really, this isn’t a joke):

We estimate your wait time to be between 15 and 30 minutes.

Rather than waiting on hold, we can call you back when it’s your turn. You will not lose your place in the queue. To receive a callback, press….

After entering my callback number (it does require a direct phone number), I was told I would receive a callback in 20 minutes…and I did! This is a marked improvement, and I’m surprised the IRS hasn’t publicized it.

Additionally, I’ve been told the ability to receive callbacks has been added to the IRS’s Identity Protection Unit. This year, the IRS has sent out 25% more letters requiring individuals to prove their identity while staff has been cut. Getting through to that number has been extremely difficult. Callbacks make the identity verification process a little easier.

All-in-all, kudos to the IRS for adding some technology that helps users.

Don’t Call Us Continues

Wednesday, April 22nd, 2015

Back in the 1970s Saturday Night Live had this sketch of Lily Tomlin reprising her role as Ernestine the phone company operator (from Laugh-In):

That’s how I feel about calling the IRS. I have three matters I need to get resolved with the IRS. Today, the response I received when calling the IRS’s Practitioner Priority Service was, “Due to extremely high call volumes that option is not available now. Please try your call again later.” Well, I tried again later. And later. And later still. “We’re sorry, but due to extremely high call volumes that option is not available now. Please try your call again later.”

Meanwhile, we find out today that the IRS has deliberately cut customer service.

During the 2015 tax-filing season, the IRS provided what its own Commissioner described as “abysmal” customer service, blaming skyrocketing wait times for telephone and in-person assistance on agency budget cuts. The IRS even called budget cuts “a tax cut for tax cheats.” But a close review of the agency’s spending shows the IRS deliberately cut $134 million in funding for customer service to pay for other activities. Spending decisions entirely under the IRS’s control led to 16 million fewer taxpayers receiving IRS assistance this filling season. Other spending choices, including prioritizing employee bonuses and union activity on the taxpayer’s dime, used up resources that otherwise could have been used to assist another 10 million taxpayers.

The above quote is from the House Ways and Means Committee majority staff titled “Doing Less with Less: IRS’s Spending Decisions Harm Taxpayers.” There’s not much to add. If I can’t get through I’ll have to write follow-up letters; on one topic it will be my third letter without a response. On another, it’s been over one year without a response.

If anyone thinks the IRS’s budget will be increased for next year, they’re dreaming.

Don’t Call Us

Monday, March 2nd, 2015

Today I attempted to call the IRS Practitioner Priority Service (PPS). I had an outstanding issue I needed to resolve. I didn’t get through.

I’m used to being on hold for two hours when calling the IRS. Unfortunately, the IRS has cut staff in customer service. When I called today I reached the normal recording, but every time I attempted to obtain help for an individual not in collections (that’s one of the options when calling the PPS) all I got was, “Due to extremely high call volumes that option is not available now. Please try your call again later.” Sigh.

I imagine the regular phone numbers are just as bad. The IRS estimates that only 53% of phone calls will be answered this tax season. (Of course, given that the IRS’s accuracy in answering tax help questions isn’t particularly good, some of the missed calls may be to a taxpayer’s benefit.)

Still, I have to wonder about the IRS’s priorities. First, the IRS eliminated the ability for tax professionals to use e-services to enter Power of Attorney forms; that increased call volume. The IRS has apparently cut staff at the CAF Unit–the unit that processes the POAs that we now must fax in. It’s taking over a week for those POAs to be processed (the IRS “promised” four business days). That’s increased call volume. Adding the complexity of the new property regulations and the Affordable Care Act is making things worse for everyone.

There’s no moral here–this is more of a rant. But it’s a rant with a consequence: If tax professionals can’t get through on the phone to resolve issues, we’re forced to write letters. This causes delays in resolving matters, leading to more phone calls, more letters, and more cost to the IRS. Unless I’m missing something this is the path we’re heading down.

Life as a Second-Class Citizen

Friday, January 31st, 2014

I’m quite perturbed at the IRS today. The NAEA in its weekly eAlert email confirmed that I am now a second-class citizen. I reported last week about being told that tax professionals might be unable to order transcripts through the Practitioner Priority Service. The NAEA wondered about this, too:

The trouble is that we have also received several messages from members who have been turned away from PPS [Practitioner Priority Service] when requesting client transcripts. When we forwarded examples from EAs who had been denied service and instructed to file Forms 2848 (by fax, of course, because IRS cares about its partners) and wait five days to download transcripts through e-Services, the response was:

We are monitoring implementation of the changes to PPS Service and addressing any inconsistencies identified. The new policy is intended to focus the service we provide on those requests from Tax Practitioners who are working with their clients on tax account related issues that require direct contact with IRS. We will direct requests that do not support tax account work with a client and related to non-tax matters to other appropriate resources. That said, if a Tax Practitioner meeting the above criteria requires a transcript, a transcript will be provided through PPS. [Emphasis added]

So if I’m working on a tax account issue, I can call PPS, hope they agree that it’s a tax account issue, and obtain a transcript. It also means I can no longer obtain a transcript with a Tax Information Authorization (Form 8821) even though the form specifically allows for transcript requests! And even though TIGTA wanted more tax professionals to use 8821s rather than a Form 2848 (Power of Attorney) in situations where all the tax professional needs is a transcript.

I have a few clients who only want me to obtain transcripts on their behalf and do not want me to have a Power of Attorney. They now have the choice of:

  1. Giving me a Power of Attorney, allowing me to obtain transcripts, and then, after I let them know I have obtained the transcripts, revoking the Power of Attorney (giving the overworked IRS CAF unit double-work);
  2. Using the new Get a Transcript option to obtain a transcript themselves. (Though see below for problems with this service.)
  3. Giving me a Tax Information Authorization, and hoping that PPS will bend the rules and order the transcripts.

Meanwhile, the Get a Transcript has its own problems. My partner attempted to use the service, but it could not verify either him or his wife as living where he’s lived for years. Second, the verification information relies on publicly available information for many. (It did for my partner, myself, and one other individual.) This is anything but a secure system. (I have sent a request to TIGTA noting the weakness of the system and requesting that they audit it. If TIGTA audits this, it’s unlikely we will hear anything for many months–probably not until 2015.)

A special demerit needs to be awarded to NAEA for this bad advice:

As we mentioned last week in our coverage of IRS’ new online transcript delivery system (“Get Transcript”), in many cases you may find the process easier if your client goes online to pull his or her own transcript and e-mails it to you. And yes, we know this approach is complete nonsense and share our concern with the agency during nearly every conversation. [Emphasis Added]

While I agree completely with the NAEA that the new IRS policy is complete nonsense, a client should never email a transcript (unless he redacts his social security number by each entry). I requested my Wage & Income Transcript for 2012, and the document has my social security number printed by each item of income. Email is fast, but it is not secure; that’s why we and most tax professionals use a web portal for secure communications. (Had NAEA written, “…and send the transcript by secure means to you,” I’d agree completely with them.)

Overall, we have another step backwards for tax professionals. This will especially impact those with Tax Information Authorizations (8821s) on file and use them for obtaining transcripts. You will now have to obtain Powers of Attorney from every client. There is one other possible solution to this portion of the problem: Have the IRS modify eServices so that we can also obtain information when we have a Tax Information Authorization on file. Until this is done, the Tax Information Authorization has only one value: the ability to be copied on notices the IRS sends to a client.

No More Ordering Transcripts Through Practitioner Priority Service?

Thursday, January 23rd, 2014

The IRS Practitioner Priority Service (PPS) is a wonderful tool for tax professionals. It allows us an easy way to obtain information on clients, set up installment agreements, and for practitioners to deal with the IRS. This morning I called PPS to order transcripts for a client. During the conversation, the helpful woman informed me that as of this coming Monday, January 27th, PPS will no longer accept requests for transcripts.

Supposedly you will now have to fax the Power of Attorney (IRS Form 2848) to the CAF unit, wait one week for the POA to be entered into the computer system, and then download the transcript from IRS eServices. The woman stated that this new policy is on the IRS website (I couldn’t find it) and that she was told this was going into effect by her supervisor.

I’m hoping the information I received is wrong, but I suspect it isn’t. This new policy is bad for a number of reasons:

– You can no longer use a Tax Information Authorization (IRS Form 8821) to obtain transcripts even though a Form 8821 authorizes a tax professional to receive transcripts and a tax professional is supposed to use Form 8821 when the goal is only to receive a transcript. You cannot order transcripts with an 8821 through eServices.
– It will delay getting taxpayers into compliance with the IRS.
– It will take even longer to resolve issues with the IRS.

In any case, this was a surprise I could have done without.

UPDATE: I asked the NAEA if they knew anything about this. Robert Kerr emailed me back stating he suspects the staffer was misinformed but that he sent it to the National Office for clarification.

IRS Reportedly Will Close eServices’ Disclosure Authorization Program

Thursday, June 6th, 2013

The National Association of Enrolled Agents (NAEA) is reporting via its Facebook page that the IRS has decided to “retire” two products from eServices: Disclosure Authorization (DA) and Electronic Account Resolution (EAR). Apparently the IRS, which is already cementing its reputation among Congress and the public, wants to make sure that the tax professional community isn’t left out.

For those of you who aren’t tax professionals, let me explain what this is about. In order for me to represent a taxpayer in front of the IRS, I must have a signed Power of Attorney (Form 2848). Once I have a signed POA, I can either enter it in through eServices, or I can mail or fax it to the IRS Centralized Authorization File (CAF) unit. Once in the IRS’s computer system, the IRS knows that I’m representing the taxpayer. If I have a POA, the IRS will discuss and disclose a clients’ information to me. Rightly, the IRS wants the taxpayers to authorize this before I have the ability to see information.

Using eServices to enter a POA has been a great boon for my practice, and I assume anyone who deals with any representation matters. After entering the POA, I can obtain transcripts from the IRS. If a client says he hasn’t filed a (say) 2011 return, I can obtain a Wage & Income transcript and know much of what needs to be on the return. This saves me time, saves the client money, saves the IRS time (I’ve done everything in an automated manner rather than, well, see below), and increases the efficiency of the system.

This shutdown will apparently be effective on August 11th. So beginning on August 12th, I will either have to fax or mail POAs, or I can call the Practitioner Priority Service (PPS). While on the phone with PPS, I can fax over a POA (yes, I have a real fax machine in my office) and the IRS will order transcripts to be faxed back to me. (PPS will also forward the POA to the CAF unit.) However, a transcript ordered through PPS takes up to 72 hours to be received. That means a client in a representation matter will most likely need two appointments before we can make a plan of action. It can take two weeks for a POA sent to the CAF unit to be entered into the system. (Last year there were times when it was taking over a month for the CAF unit to enter information.)

This will increase my costs (which I will pass on to clients). I will have more phone calls to make, and it will take more time to obtain information. While I can do other work while on hold for PPS (hold times have been running about 30 minutes), it usually takes about 15-30 minutes once I am off hold for the IRS to verify the information. I make my income from the time I spend, so I will have to charge a client an extra amount for this time.

This will also increase the costs to the IRS. I wrote my practitioner liaison an email, and noted the additional costs:

  1. There will be many more telephone calls to PPS.  Calls where practitioners must fax documents undoubtedly take longer, so this will increase the need for personnel.
  2. There will be many more faxes to the CAF unit, requiring additional personnel.
  3. The cost for the automated portion cannot be particularly significant.  The products are there already.  In general, the processes are automated, so human intervention is less.
  4. Because it will take longer for many practitioners to obtain information—especially practitioners dealing with collections matters—it will take longer for issues to be resolved.  This will increase the burden on the IRS (both in manpower and in slowing down collections).

I have no idea what the IRS was thinking when they made this decision. This decision is, at best, penny-wise and pound foolish. I guess Sir Isaac Newton’s Third Law of Motion has been proven again: For every action, there is an equal and opposite reaction. This morning, I reported on a decision by the IRS that makes complete sense and will save both the IRS and taxpayers time and money. So a decision by the IRS that would cost taxpayers and the IRS money was, I suppose, inevitable.