Fascinating. Thanks for highlighting a part of the IRS that the current administration has, surprisingly, left alone. I'm stunned it hasn't apparently lost employees due to DOGE or other choices made in the last year. I spent three years as a part-time tax preparer after I retired from the Army and moved to Missouri. My wife and I were both Army officers who'd never been stationed in our home states so did not have to complete a state tax return. I took the prep course to learn how to do that and got hired. I even taught the basic tax prep classes the company required for a year.
I've received those IRS letters when I've made an error, and I've also had to interpret them for tax clients, and they're hard to understand. I'm happy to see that there's now an effort to make that process simpler. I should mention that every IRS employee I met in my tax prep days was unfailingly smart, courteous, and genuinely helpful. The folks you mention here certainly exemplify that.
Here's the problem. That same company that I worked for has joined others in the world of tax preparation in keeping our tax system complicated so it can keep its business model intact. That group also got the IRS to shut down its free tax prep system (though not its free e-filing system) that basically does what other countries you mention do. And other countries have simpler tax codes than we do, so having the government send an estimate of taxes owed is also much simpler. The scandal is deliberately keeping our tax system complicated for the benefit of the few, connected entities who can influence legislation with campaign contributions.
I had an unusual situation where the IRS' computer program had an error in how they processed a particular entry for tax year 2022. I got a larger refund in spring 2023 than what TurboTax had calculated for me in my filing - with of course no explanation for why they sent me more back. Then in late 2024, I got an IRS notice saying I owed them some $500 because of an error their system had made on my 2022 return (with scant explanation, but at least I knew what it was, so the paucity of detail in their notice didn't faze me), and of course they gave me limited time to pay it, with threats of escalating fines in case there was a delay etc. Surely there's a better way these things can be handled.
Glad there's a National Taxpayer Advocate office and that some of their recommendations are being acted upon.
Good morning Gabe. I always find your articles helpful. Thanks. I suspect you have written about this in the past, but I don’t think this article shows your appreciation for the difficulty of the IRS‘s job. More specificity in these notices will require additional time and resources. Did this legislation provide any additional resources for the IRS to meet this requirement? I appreciate your efforts to show the nuts and bolts of how the federal government actually works. Thank you for all your hard work.
What additional time and resources? The IRS has identified the problem. They have simply failed to adequately inform the customer, instead just telling the customer that a problem exists.
How would you like it if your bank sent you a notice that there’s an error in your account , and that they will start charging you interest and fines if you don’t pay up. BTW, you get to figure out what and where the error is.
This is an administrative failure at the IRS, quickly and easily resolved at the administrative level. Why should it take an act of Congress to fix it?
One thing that wasn’t mentioned in the article is when the IRS is wrong with their analysis. During COVID I received a letter stating that one of 4 items was wrong when each of them were correct. I called the number on the notice I received to repeal and they transferred me to another number that said I needed to call a different number which also couldn’t help me. I then appealed my mail with my worksheets showing how my math was correct. I didn’t hear back until several years later when I then received my full refund.
Fascinating. Thanks for highlighting a part of the IRS that the current administration has, surprisingly, left alone. I'm stunned it hasn't apparently lost employees due to DOGE or other choices made in the last year. I spent three years as a part-time tax preparer after I retired from the Army and moved to Missouri. My wife and I were both Army officers who'd never been stationed in our home states so did not have to complete a state tax return. I took the prep course to learn how to do that and got hired. I even taught the basic tax prep classes the company required for a year.
I've received those IRS letters when I've made an error, and I've also had to interpret them for tax clients, and they're hard to understand. I'm happy to see that there's now an effort to make that process simpler. I should mention that every IRS employee I met in my tax prep days was unfailingly smart, courteous, and genuinely helpful. The folks you mention here certainly exemplify that.
Here's the problem. That same company that I worked for has joined others in the world of tax preparation in keeping our tax system complicated so it can keep its business model intact. That group also got the IRS to shut down its free tax prep system (though not its free e-filing system) that basically does what other countries you mention do. And other countries have simpler tax codes than we do, so having the government send an estimate of taxes owed is also much simpler. The scandal is deliberately keeping our tax system complicated for the benefit of the few, connected entities who can influence legislation with campaign contributions.
I wish this mentioned the IRS's Direct File program, which allowed people to file their tax returns directly to the government for free like those 30 countries. The tax prep industry spend decades lobbying against any improvements like that, and then Direct File was shut down by the Trump administration. https://www.propublica.org/article/inside-turbotax-20-year-fight-to-stop-americans-from-filing-their-taxes-for-free
Yes, this. ⬆️
The fact that millions of average taxpayers pay private companies billions in order to fulfill a basic civic duty is a travesty.
Very informative, thanks, Gabe!
I had an unusual situation where the IRS' computer program had an error in how they processed a particular entry for tax year 2022. I got a larger refund in spring 2023 than what TurboTax had calculated for me in my filing - with of course no explanation for why they sent me more back. Then in late 2024, I got an IRS notice saying I owed them some $500 because of an error their system had made on my 2022 return (with scant explanation, but at least I knew what it was, so the paucity of detail in their notice didn't faze me), and of course they gave me limited time to pay it, with threats of escalating fines in case there was a delay etc. Surely there's a better way these things can be handled.
Glad there's a National Taxpayer Advocate office and that some of their recommendations are being acted upon.
Yay! Something got done! (That is not sarcasm, by the way. I’m truly happy to see something accomplished!)
Thanks Gabe. This was really informative.
Why the hell does what should be an act of simple administrative competence require the prior action of two bodies of hundreds of elected officials?
Are the people being hired back at the IRS or are the current employees expected to wade through all of these changes and recommendations?
Good morning Gabe. I always find your articles helpful. Thanks. I suspect you have written about this in the past, but I don’t think this article shows your appreciation for the difficulty of the IRS‘s job. More specificity in these notices will require additional time and resources. Did this legislation provide any additional resources for the IRS to meet this requirement? I appreciate your efforts to show the nuts and bolts of how the federal government actually works. Thank you for all your hard work.
What additional time and resources? The IRS has identified the problem. They have simply failed to adequately inform the customer, instead just telling the customer that a problem exists.
How would you like it if your bank sent you a notice that there’s an error in your account , and that they will start charging you interest and fines if you don’t pay up. BTW, you get to figure out what and where the error is.
This is an administrative failure at the IRS, quickly and easily resolved at the administrative level. Why should it take an act of Congress to fix it?
One thing that wasn’t mentioned in the article is when the IRS is wrong with their analysis. During COVID I received a letter stating that one of 4 items was wrong when each of them were correct. I called the number on the notice I received to repeal and they transferred me to another number that said I needed to call a different number which also couldn’t help me. I then appealed my mail with my worksheets showing how my math was correct. I didn’t hear back until several years later when I then received my full refund.
Aloha. From the COCONUT WIRELESS........,..................
Flat with UBi
should really simplify
oh my!
IRS definitely needs reform!
can you address the Somali scandal in Minneapolis? seems complicated...