In a report released by the IRS Ombudsman today, National Taxpayer Advocate Nina E. Olson warned Congress that increased demands on the IRS have eroded the agency’s ability to meet taxpayer service needs. This year the IRS has a target to answer only 71% of calls from taxpayers seeking to talk to a customer service representative about account questions. Callers will have an average wait time of 12 minutes. That means the IRS won’t answer 3 out of 10 calls.

Another study found that the IRS procedures for determining a taxpayer’s ability to pay outstanding liabilities may be driving some into long-term noncompliance because the IRS will not consider other debts like credit card debt, school loan balances and medical bills.  These people are dropping out of the system. Ms. Olsen said  “Taxpayers are placed in the intolerable position of agreeing to pay the IRS more than they can actually afford (given their other debts) and then defaulting on the IRS payment arrangements when they channel payments to unsecured creditors in order to get some peace. Thus, the IRS itself fosters noncompliance by its failure to take a holistic approach to the taxpayer’s debt situation.”  She advocates the IRS change their policy and not file tax liens against people that don’t have the ability to pay. The complete report is at:

http://www.irs.gov/newsroom/article/0,,id=217903,00.html

She also praised the IRS for moving ahead with plans to regulate federal income tax preparers. The plan covers unenrolled preparers which excludes attorneys, CPA’s and Enrolled Agents who already must pass a rigid exam in order to practice.