The IRS Has Pledged to ‘Dramatically Improve Services.’ Here Are Some Areas It Should Target

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The IRS needs an overhaul. Read on to see where it stands to improve. 

There’s a reason so many people have struggled with their taxes for years. The IRS has been sorely underfunded for decades, and as a result, reaching the agency and getting help from it has been akin to a nightmare.

But things may soon be changing for the better. As part of the Inflation Reduction Act, the IRS has been approved for $80 billion in funding over a 10-year period of time. And while some of that money will be earmarked for enforcement (meaning audits), much of it will be used to enhance the taxpayer experience.

In fact, the IRS recently released its Strategic Operating Plan for 2023 through 2031. As part of that plan, the IRS has pledged to “dramatically improve services to help taxpayers meet their obligations and receive the tax incentives for which they are eligible.” Here are some specific areas that could use improvements.

1. Wait times

It’s not uncommon to call the IRS for help and wait on hold for an hour. And during tax season, you might wait even longer — that is, if you even manage to get through to an agent at all.

In 2021, the IRS received a record 282 million calls, but only 32 million of those calls were answered by an actual customer service agent. Now that the IRS has added funding coming its way, it can use the money to ramp up hiring so taxpayers aren’t subjected to unreasonable wait times. This is especially important during tax season, when people may be staring down a filing deadline.

2. Agent education

Even if you manage to get an IRS agent on the phone, you’re not guaranteed to connect with someone who’s actually capable of answering your questions accurately or helping you to resolve the issue at hand. Now that the IRS is getting an influx of cash, it will ideally use some of that money to provide more training so that when agents pick up the phone, they’re in a better position to assist callers.

3. Free tax help

The IRS has programs in place to help certain tax-filers get free assistance. The Volunteer Income Tax Assistance program, for example, is designed to provide tax help for low-income filers and those with language barriers.

But even so, there are many tax-filers who may need assistance with their taxes but can’t afford the fees a tax preparer might charge. Ideally, the IRS will expand its free offerings so more people can get the guidance they need.

Some people may be worried that additional IRS funding will result in an uptick in audit rates and therefore nothing good. But actually, a well-funded agency could make the process of filing taxes much smoother on a whole for everyone. Also, the more manpower the IRS has, the easier it might become to issue refunds. So if you like the idea of seeing your money hit your bank account sooner every year, then you may want to embrace the idea of additional IRS funding.

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The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Maurie Backman has positions in Target. The Motley Fool has positions in and recommends Target. The Motley Fool has a disclosure policy.

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