IRS picks up just 1 call in 5, GAO finds

With tens of billions of dollars on the way but a high attrition rate among employees and aging technology, the IRS is confronting major customer service and information security problems.

The IRS "has struggled with long-standing challenges in providing taxpayer service, processing returns, safeguarding sensitive information and replacing legacy IT systems," according to Oct. 24 testimony to a House subcommittee by Jessica Lucas-Judy, a director of strategic issues for the U.S. Government Accountability Office, a watchdog agency that reports to Congress. The report provided financial advisors and tax professionals with the latest available explanation of why reaching agency staff on the phone or getting a response from the IRS can take so long.

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At least 55% of taxpayer correspondence waited longer than 45 days for an IRS reply in the 2022 filing season, when the agency answered fewer than one in five calls, according to the report. The IRS managed to slash a backlog of unanswered messages from the prior year to 400,000 from 5 million in the first nine months of 2022. The agency is hiring staff in several departments using the major appropriations coming from the Inflation Reduction Act. However, it faces an attrition rate more than two times as high for the returns processing staff as the rest of the agency and the loss of 23% of new recruits to all positions in the first two or three years.

"GAO has made a number of recommendations to [the] IRS to address various issues in service and processing, data safeguards and IT," according to the report. "[The] IRS generally agreed with these recommendations and has taken action to implement many, but others still need to be fully addressed. These include improvements in digitizing information, workforce planning and increasing contractor oversight, among others."

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The watchdog counted 32 information security recommendations that the IRS had yet to implement as of the end of fiscal year 2022. In particular, outside contractors working for the agency are completing privacy, cybersecurity and other safeguarding training far less frequently than direct IRS employees. 

The IRS is also working to replace its 60-year-old Individual Master File, which is "the authoritative data source for individual tax account data" but "uses software written in an archaic language and requires specialized skills," according to the report. That project started more than a decade ago. An action plan on how the agency will use the money from the Inflation Reduction Act pushed up the expected retirement date for the system by two years to fiscal year 2028.