National taxpayer advocate warns of IRS mission expansion.

• Author: Dolan, Michael P.

In the introduction to her recent report to Congress, IRS National Taxpayer Advocate (NTA) Nina Olson warns that recent expansion of the IRS mission is straining some of its core capabilities (National Taxpayer Advocate, Report to Congress: Fiscal Year 2011 Objectives (June 30, 2010)). The NTA lays out the numerous instances in which Congress has assigned the IRS "social benefit" missions that have placed the IRS in the position of processing billions of dollars of benefits to millions of taxpayers. She points specifically to the economic stimulus payment program, making work pay credits, first-time homebuyer credits, and hybrid car credit payments--all of which she projects will be dwarfed by the responsibilities that accrue to the IRS under the recently enacted health care legislation.

While the report credits the IRS with having successfully accomplished myriad new tasks--often under severe time and resource constraints--it warns that those successes have taken a toll on the IRS's core taxpayer service capacity. As evidence of the strain imposed by the mission creep, the NTA reports that taxpayers and practitioners must routinely wait an average of 10 minutes to get through to the IRS on the phone; in that process, more than 25% of those taxpayers who wish to reach a live assistor are unable to do so. She also reported that as of June 19, 2010, over half of all individual taxpayer correspondence in the adjustment inventory was "overage" (i.e., the IRS had not responded promptly). Commenting further on the expansions of the IRS mission, the NTA expresses an overarching concern that the expanded mission has come at a magnitude and pace that has required the IRS to build and modify systems "on the fly," a condition that could produce errors that may erode public confidence in the IRS's performance.

The NTA does not call for a retreat to a tax-only mission. She acknowledges the infeasibility of turning the clock back, but she calls on Congress and the administration to adequately resource and explicitly acknowledge the IRS's expanded mission. In what will likely be a controversial suggestion both inside and outside the IRS, the NTA goes so far as to suggest that the IRS revise its mission statement to reflect the organization's "dual mission."

In Olson's view, an expanding IRS mission places the greatest demands on taxpayer service capabilities (e.g., processing, phones, and correspondence). According to the report, increased demands on...