On Tuesday, the IRS Commissioner sent out an internal memo warning of potential problems during this season resulting from budget cuts. These included an extension of a hiring freeze that will result in 3,000-4,000 unfilled positions, less resources for customer service, enforcement, and overtime, and a potential two day furlough for employees. When considering inflation, the IRS budget is at its lowest since 1998.
How will this impact taxpayers? It will be felt most directly in customer service. Over the past six months, hold times when calling the IRS have increased dramatically. I called the practitioner line on Tuesday, and was on hold for an hour and forty minutes before getting an actual person. A client called the IRS on Tuesday on the business line, and was on hold for a total of two hours. The National Taxpayer Advocate, Nina Olson, filed a report on Wednesday surmising that any calls to the IRS during this filing season will be subject to waits of at least 30 minutes, and that 57% of calls might not be answered at all. I have personal experience with this too, having spent more than an hour on hold multiple times recently only to have the call disconnect.
The Commissioner also noted that aging IT systems will not be replaced. I suspect these systems are still run by punchcards, or at best, MS-DOS. This will also impact return processing and call times. Another potential problem is a delay to refunds due to increased processing time of new and revised forms, particularly with returns that are paper filed.
The IRS starts accepting 2014 returns on Tuesday, January 20. It's the most wonderful time of the year!