Dealing with a Leaner IRS in 2015 - What does it Mean for your Tax Problem Case?

Thanks to repeated cuts to the IRS by the GOP-controlled congress over the last five years, dealing with the IRS on a daily basis has become arduous in some ways and easier in others. Here's some insights gleaned from staff members recently regarding the smaller IRS:

1. IRS Hold Times Extended and "Courtesy Hang-ups" - It might be harder to get a hold of the IRS since the advent of the phone. You can expect huge hold times and "courtesy" hang-ups. This is a pretty well reported phenomena: Less than Half of Calls Received by IRS. If you have a technical IRS question or an urgent matter to deal with - the fewer staff to answer the phone can really hurt you.

2. IRS Payment Plans and Currently-Not-Collectible (CNC) Requests Take Time to Process - On the plus side, your paper request for an installment agreement or to be placed in hardship status (CNC) are taking longer to process. I think it is safe to say that a payment plan that you submit with a 433-D form will take 2 1/2 months to 4 months to process - giving you a nice grace period to get your finances in order before it kicks in (and extra time on the statute of limitations clock as well!).

3. Estates and Trust Filings - Little Enforcement - If you were one of those rare families with an Estate over $5.34 million in 2015, don't expect to the IRS to come banging on your door if you didn't file the form 706 or 1041. Do you have a Trust? We see very little monitoring of the filing of trust forms. At least - that's our perception. Other accounting firms might see more - but we don't see any IRS staff assigned to Estates and Trusts. Pretty pathetic to see such an absence of scrutiny for such an important division. But you can be sure if you file these forms late - penalties will be slapped on them - for late filing and add in interest.

4. IRS Collections - Regional Slack in Enforcement - Depending on where you live and how much you owe, there are some folks with big tax debts who are in a queue to be assigned an IRS Revenue Officer. I've heard Texas and Florida are two locales where the debtors are just too numerous to be pursued efficiently by the leaner staff.

5. IRS Audit Reconsiderations Hitting Black Hole - Audit reconsiderations to fix audits are also hitting a black hole these days often requiring the help of Taxpayer advocate to resuscitate.