IRS customer service twice as bad in first year of Obamacare tax

IRS customer service representatives managed to answer only about a tenth of taxpayers’ phone calls this season, and even the lucky ones waited an average of nearly 25 minutes before getting through, the agency’s auditor reported Thursday.

Of the 45.6 million calls placed through early March, only 4.2 million were answered by an IRS employee, according to the IRS’s inspector general. Others went to automated lines, for an official level of service rating of 38.5 percent — almost twice as bad as last year’s 74.7 percent rating.

Agency Commissioner John Koskinen has blamed budget cuts, saying he’s pulled people from answering phones and is trying to steer taxpayers to find answers online or through other automated systems, rather than expecting someone to be able to help by phone.

But members of Congress, who have trimmed the IRS’s budget in recent years, say the agency is still wasting money on bum projects such as public opinion polling, or on ideological witch hunts such as trying to write rules to crack down on political activity by nonprofit groups.

Overall, taxpayers were filing somewhat slower than in 2014, with just 66.7 million returns submitted by March 6, 2015 — down from 67.2 million at that point the year before. The average refund ticked up slightly, to $2,988.

In an effort to cut down on fraud, the IRS for the first time this year is limiting the number of direct deposit refunds paid to a single address to a maximum of three. The inspector general has reported that some addresses have hundreds of tax refunds associated with them, suggesting a scam. A future report will look at how the new three-refund rule is working.

This is also the first year for filing returns that comply with Obamacare, and the inspector general said that as of March 5, more than 6.2 tax returns had claimed at least one exemption from the Affordable Care Act requirement that all Americans have insurance.

Another 3.7 million returns had paid the Obamacare tax, totaling $655 million.

In terms of customer service, the IRS had projected a rating of 41 percent, so the 38 percent it notched in the first two months of the year was a disappointment.

The inspector general also said the IRS is increasingly bad at processing paper correspondence, and currently has a backlog of 1.2 million pieces that have been waiting at least 45 days for some answer or action by the agency.