The IRS: A Study in Inefficiency
I normally like to research and think about anything I blog about and I really didn’t have the time to do that today, so I thought I’d share an experience I had today with the Internal Revenue Service. As a CPA with a tax oriented practice, I frequently interact with the IRS. Most of that interaction is with IRS agents, calls to special non-public hotlines they’ve set up for practitioners or via their e-services website. Usually, those interactions allow me to get done whatever I need to get done with minimum hassle and frustration. That’s not to suggest that all of those interactions are happy, but they’re generally conclusive and reasonably efficient.
Today I had to call the regular public number on a client matter involving a situation on a defaulted installment arrangement. (Just like mortgages and other debt, folks are defaulting on the IRS in record numbers as well). I was waiting on the phone for 30 minutes before the line dropped and I had to call back in get in queue. So, I called them back and after waiting another 15 minutes, I was told that I might want to call back later as the lines would be open until 10:00 pm and the wait might be less later in the evening. I called around 9:30 pm and the automated attendant says that my wait will be at least 30 minutes and I just decided that I’ll give this a shot tomorrow and hung up. All told, I burnt up an hour of my time today just being on hold with them. Since I was unable to get though to them, I accomplished absolutely nothing for my client.
I frequently interact with state tax authorities as well, and on the balance, they’re far more efficient than the IRS. It is beyond ridiculous how the IRS operates with today’s technological advances. I have mixed feelings on privatization of government functions, but this is one that probably needs to be privatized. If you can’t efficiently deal with taxpayers or their representatives, then that has to mean greater expenses to collect even less money.
To be fair however, much of the IRS’s problems are a result of administering an increasingly byzantine tax code that they themselves struggle with. Rather than update its computer systems or train its people, perhaps the far easier thing to do is the just simplify the entire tax structure. Administering a consumption based tax would be far easier to do while also possibly raising more money by getting at the underground economy that’s not paying taxes under the current system. Since everyone has to consume something at some point, that means that the underground economy wouldn’t escape taxation as they often do now. I won’t hold my breath on this one as it’s just another one of those things that makes too much sense, so it will never been done.