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Is help from the IRS of any use?
USA Today (Society for the Advancement of Education), Jan, 2005 by Jeff A. Schnepper
TAX SEASON is not too far away. Now is a good time to start getting your tax ducks in order. The Internal Revenue Service can provide a lot of help. The real question pertains to the quality of that help. Two decades ago, Ralph Nader's Tax Reform Research Group prepared 22 identical tax reports based on the fictional economic plight of a married couple with one child. These were submitted to 22 different IRS offices around the country. Each came up with a different tax figure. Results varied from a refund of $811.96 recommended in Flushing, N.Y. to a tax-due figure of $52.13 by the IRS office in Portland, Ore. Was that help? Well, it did get me to thinking about moving to Flushing.
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My favorite IRS tax aids are the phone numbers the agency provided in two 2001 publications. Call and you were referred to adult chat lines. Seriously, though, the IRS can help. Send a fax to 703-368-9694 for any forms you need. If you do not have access to a fax, call 800-TAX-FORM and they will be mailed to you. It even is possible to get Braille tax products at that number.
You can hear recorded messages on about 150 tax topics at 800-829-4477. If you need an Employer Identification Number, one is available immediately by phoning 800-829-4933. Have a question you need to talk to someone about? Call the Tax Help Line at 800-829-1040.
Here is where it may become sticky, though. In reviewing the IRS's 2002 tax season, the General Accounting Office reported that IRS customer service representatives answered 1,600,000 more calls than the prior year. However, that was 2,600,000 less than the projected goal. Phone service did get better in 2003. The IRS provided 872,000 more toll-free services than in 2002. Still, 6,700,000 taxpayers were disconnected. According to former House Ways and Means Committee Oversight Subcommittee Chairman, J.J. Pickle, "Calling the IRS for tax advice is a real crap shoot."
Things were not much better if you came in person. The IRS has over 400 offices nationwide where you can walk in and get help. They are called Taxpayer Assistance Centers and you can find the one closest to you at 800-829-1040. Here again, though, you are dealing with people who are supposed to know the law. Yet, you may have a better shot at the fight answer on the "Tax Corner" website. Thirty percent of the answers were incorrect in a 2003 test of the system by the Treasury Inspector General. In a December, 2003, survey of assistance sites across the country, IRS employees incorrectly prepared 19 of 23 returns.
The Treasury Inspector General tested the system again to measure the quality of taxpayer assistance during the 2004 filing season. More bad news. Thirty-eight percent of the answers provided by customer service representatives were inaccurate. The poor performance was attributed to the reps not using the prepared guide scripts or not interpreting the law correctly. Well, no kidding! Not interpreting the law correctly is what defines a wrong answer.
It is easy to find fault with the IRS help. In all fairness, though, that hardly is the full story. Our tax code is so complicated and convoluted that many professionals fail to provide the fight answers, either. Starting in 1988, Money magazine has conducted an annual study where 50 tax professionals--including attorneys and CPAs--have been asked to complete a tax return for a hypothetical family. The results have been unnerving! The professional preparers come up with different results each year--with spreads of as much as $1,000.
Let's see where we are. The IRS cannot get the answers right and neither can the professionals. That may explain why there have been Supreme Court tax cases where as many as four of the Justices got the answer "wrong."
That's the good news. The bad news is that IRS advice is not binding--whether oral or in print. You cannot rely on IRS publications, even the famed Publication 17, Your Federal Income Tax. If there is a mistake in print--tough!
Thankfully, then-IRS Commissioner Lawrence Gibbs initiated a policy where penalties would not be imposed on taxpayers who relied on incorrect information from IRS telephone taxpayer assistance personnel. That's just the penalties, however, not the tax itself. Moreover, you, the taxpayer, have the burden of maintaining a record of the name of the IRS employee who supplied the incorrect information as well as the date of the conversation.
Finally, the IRS has a compilation of free tax services in Publication 910. It details all of the possible free taxpayer assistance services available. You can get it at the IRS website (www.irs.gov). That site also is the source of forms and tax law analysis. Good luck; you certainly will need it.
Jeff A. Schnepper, Associate Economics Editor of USA Today, is an attorney and estate planner in Cherry Hill, N.J., and author of How to Pay Zero Taxes.
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