Inadequate Training of IRS Employees Harms Taxpayers, Creates IRS Rework, and Erodes IRS Employee Morale
Article Published by: taxpayeradvocate.irs.org
As part of my recently released Annual Report to Congress, I identified IRS employee training as one of the Most Serious Problems facing taxpayers.
It may seem counterintuitive that an internal issue such as training could be a most serious problem for taxpayers; however, if the IRS does not properly train its employees, taxpayers will feel the negative consequences of that failure. I previously identified IRS employee training as a Most Serious Problem in my 2013 Annual Report to Congress. Since 2013 I have continued to hear concerns from taxpayers and practitioners about receiving incorrect answers from the IRS and complaints about employees not being able to assist if the issue presented goes beyond the scope of the script that an employee has available for that tax topic. As a result, I decided to review the state of training four years later and found a grim situation.
The Taxpayer Advocate Service (TAS) found that while the IRS has actually increased the training budget since a low point of nearly $23 million in fiscal year (FY) 2013, cuts to spending on training far outpace cuts to the overall IRS budget. In non-inflation adjusted dollars, the IRS budget has been cut by just under $300 million dollars, or about 2.5 percent, since FY 2009, while the training budget has declined by nearly 75 percent. In FY 2017 the IRS spent only $489 per employee on training, or almost $1,000 fewer when compared to $1,450 per employee spent in FY 2009.
When I took a closer look at how the IRS was spending training funds, I found that it did not devote any discernable resources to the Wage and Investment (W&I) division training. W&I is the largest IRS operating division, with nearly 35,000 employees, or 43 percent of the IRS workforce, but it spent only $87 per employee on training in FY 2017. Even more concerning is that the IRS spent $1 million fewer on training W&I employees in FY 2017 than it did at the low point of overall training spending in FY 2013.
Consider what W&I employees do at the IRS – if a taxpayer calls or visits the IRS, he or she is most likely going to interact with a W&I employee. W&I employees staff the Taxpayer Assistance Centers and answer the majority of calls to the IRS Toll-Free line. In essence, W&I employees are the face of the IRS, yet the IRS is spending a de minimus amount of $87 per employee to train them. Taxpayers and practitioners rely on these employees to receive a correct answer when they call or visit the IRS. Whether it be an account-related issue or a tax law question, an abatement of a penalty for reasonable cause or a streamlined installment agreement, IRS employees need to be adequately trained to effectively administer the internal revenue laws. Failing to provide adequate and robust training to these customer-facing employees harms voluntary compliance and undermines taxpayers’ rights to be informed and to quality service. Such an approach to training also negatively impacts employee morale by failing to provide employees with the tools they need to do their jobs.
To compare the FY 2013 IRS employee training to the FY 2017, I had my staff research the same key job series for FY 2017 that I identified in FY 2013 – tax examining technicians, revenue agents, revenue officers, customer service specialists, bankruptcy specialists, and tax analysts in each IRS operating division. We found that training among the same series in different operating divisions varies wildly. For example, tax examining technicians in the Tax Exempt and Government Entities (TE/GE) division received only 19 hours of training per employee in FY 17, while those employees in W&I received 65 hours. The IRS-wide position description for the Tax Examining Technician details that these employees must possess extensive knowledge of individual and business tax law, forms, regulations, collection techniques, notices, and many other IRS documents. After you back out the required mandatory briefings all employees must take, the TE/GE employees received just 14 hours of substantive training per employee in FY 17. That’s not even two full work days of training all year. It seems far-fetched that employees could receive training on updates to the tax law, refresher courses, and training on processes and procedures in only 14 hours a year.
I also remain concerned about the continued decrease in face-to-face training in key job series. In FY 2013, the IRS cut almost all in-person training. However, hours of in-person training decreased further in FY 2017 in some of the key job series we identified. For example, Small Business/Self Employed (SB/SE) Revenue agents received 36 hours of in-person training in FY 2013, while in FY 2017 they received only 21 hours of in-person training. Similarly, TE/GE Revenue Agents received nearly 27 hours of in-person training in FY 2013 while they received less than seven hours of in-person training in FY 2017.
While I understand that in-person training can be costly, there are many effective methods of delivering in-person training that can reduce costs. In-person training provides opportunities for employees to solve problems, exchange ideas, and learn from each other. It also helps instructors identify areas in the training that need clarification or further development. TAS employs many strategies to deliver in-person training. For example, at last year’s Congressional Affairs Program conference for Local Taxpayer Advocates (LTAs), TAS delivered “train the trainer” training to the LTAs. This training focused on effective communication with taxpayers and interview techniques. The LTAs took this training back to their offices to train other employees in these critical skills.
Further, TAS makes use of outside experts in developing and deploying training. Over the course of the last year, TAS delivered training on the Most Litigated Tax Issues from the 2016 Annual Report to Congress. The training involved videos of the National Taxpayer Advocate, a practitioner from a Low Income Taxpayer Clinic, and a TAS attorney advisor discussing the underlying law as well as cases decided under that provision during the past year. At points in the training, the taped program was paused for facilitated group discussions, allowing TAS employees in their local offices to discuss face-to-face the facts provided and reach a conclusion about the case, promoting collaboration and discussion.
I am concerned about the downstream consequences of failing to adequately and appropriately train employees. When taxpayers receive an incorrect answer, it erodes trust in the IRS and leads to rework for the IRS or additional cases coming to TAS to get the right answer for the taxpayer. In light of the recent tax code legislation, employees will need training on the changes to the tax code quickly to be prepared for the inquiries that are sure to come from taxpayers and practitioners as they attempt to figure out how the changes impact their tax situations. Given the dollars the IRS is currently spending on training and the hours devoted to training per employee, it is hard to imagine how the IRS will effectively deliver training on the new legislation.
You can read more about my concerns about the state of IRS employee training and my recommendations to help address the issues in the Most Serious Problem: IRS Employee Training: Changes to and Reductions in IRS Employee Training Hinder the IRS’s Ability to Provide Top Quality Service to Taxpayers.
ABOUT MICHAEL SMERIGLIO:
Michael Smeriglio III is a financial specialist. A licensed CPA since 1985, Mike has been providing tax preparation services to individuals and businesses for more than 30 years through his firm located in Greenwich, CT.