Hello? 8M phone calls unanswered as IRS cut taxpayer service

WASHINGTON — The IRS’ overloaded phone system hung up on more than 8 million taxpayers this filing season as the agency cut millions of dollars from taxpayer services to help pay to enforce President Barack Obama’s health law.

For those who weren’t disconnected, only 40 percent actually got through to a person. And many of those people had to wait on hold for more than 30 minutes, IRS Commissioner John Koskinen said Wednesday.

The number of disconnected callers spiked just as taxpayers were being hit with new requirements under the health law. Last year, the phone system dropped 360,000 calls, Koskinen said.

For the first time, taxpayers had to report whether they had health insurance last year on their tax returns. Those who received government subsidies had to respond whether they received the correct amount. People without insurance faced fines, collected by the IRS, if they did not qualify for an exemption.

A new staff report by Republicans on the House Ways and Means Committee criticized the agency’s spending priorities. The report said the IRS diverted $134 million in user fees that had been spent on customer service last year to other areas this year.

When too many people call at once, the IRS system hangs up on callers at the beginning of their calls, rather than have them wait on hold for an hour or more. The agency refers to these hang-ups as “courtesy disconnects,” according to the Ways and Means report.

Koskinen warned at the beginning of the year that phone service would suffer this year because of budget cuts. He said the agency, which has around 90,000 employees, is down 13,000 workers since 2010.

Koskinen defended paying performance bonuses, saying they improve productivity. He said federal law requires the IRS to allow workers to engage in union activities while getting paid.