Excruciatingly long holds on the Internal Revenue Service’s help line this year mean that taxpayers need to find better ways to get their questions answered.
The problems start with the fact that the IRS has cut nearly 12,000 positions as its budget has fallen by an inflation-adjusted 17% since 2010.
New health insurance requirements are also creating more paperwork. People with health coverage through their employers or other groups will just have to check a box, but those with coverage through Affordable Care Act insurance exchanges, or who are applying for an exemption, will have to submit more forms.
In addition, the IRS changed the rules on how repairs to tangible property are treated, requiring accounting changes for businesses, including landlords, that own real estate and equipment.
As there will likely be a last-minute crush of work for professionals as affected taxpayers belatedly learn about the changes, it’s best to start as early as possible, says Melanie Lauridsen, tax technical manager for the American Institute of Certified Public Accountants.
The National Taxpayer Advocate earlier this year predicted that about half of all hotline calls wouldn’t be answered and average wait times would stretch beyond 30 minutes.
Compare that to fiscal year 2004, when the IRS answered 87% of calls with average wait times of less than three minutes.
Tax professionals, who have their own dedicated hotline with the IRS, aren’t being spared either. One CPA recently spent two hours and nine minutes on hold before his call to the tax practioner’s hotline was answered, and his experience isn’t unusual, said AICPA’s Lauridsen.
“It’s going to be a horrible filing season for everyone,” she said. “As we’re getting deeper into the filing season, the wait times are getting worse.”
And taxpayers who get through to the IRS have no guarantees their question will be answered, Lauridsen added. This year helpline staff are limiting their answers to “basic” tax law inquiries, and won’t answer any tax law questions at all after the filing season ends.
Some free alternatives to the helpline exist, including:
1. The IRS website. Not only does the IRS site have every form and publication you’re likely to need, but the site also handles some of the most common tasks, including paying your tax bill, setting up a payment plan, getting a transcript of your return, and checking on the status of your refund (which you also can do with the agency’s mobile app, IRS2Go). The site features an interactive tax assistant, which uses an interview format to answer some of the most common preparation and filing questions.
2. Walk-in centers. You can make an appointment to get free face-to-face help at one of the Taxpayer Assistance Centers. As with the IRS helpline, only basic tax law questions will be answered and only until April 15. The centers no longer will help you prepare a tax return.
3. Tax software. The IRS’ Free File program allows people with incomes under $60,000 to use popular tax preparation software such as H&R Block, TaxAct and TurboTax for free.
The programs offer an interview format and built-in error checkers that catch math and other common mistakes.
4. Volunteer sites. The AARP Foundation’s 35,000 Tax-Aide volunteers helped 2.6 million people file their returns last year, said Dorothy Howe, the program’s assistant national director. The program is designed to help low- to moderate-income people, but there’s no age limit, Howe said.
“Even though this is being offered by AARP, you don’t have to be over 50 and you don’t have to be retired,” Howe said.
What you do have to have is a relative straightforward return, Howe said. A 1040 with some itemized deductions is fine. If you’re a day trader with a ton of investments or a small business owner, you should hire a tax pro.