When clients come to Bill Nemeth, they have one wish: Please make it go away. "It," in this case, is a problem with the Internal Revenue Service.
Nemeth makes his living representing people before the IRS: He's an enrolled agent, the highest credential the IRS awards. He helps makes nasty tax things - fines, penalties, liens - go away. He's on the phone with the IRS every day. But these days, he's mostly on hold. "I was on hold for an hour and a half last night," he says.
And Nemeth gets to use the practitioner priority line, which puts him ahead of regular taxpayers who just want to know what form they have to file for reporting a capital gain from a stock profit. (That would be Schedule D.) Nemeth says his wait time used to be 15 minutes or so. Now it's often more than an hour.
For the average taxpayer, the waits are long and often futile: 39% of those who called the IRS last year simply hung up before their call was answered, according to a scathing recent report by the IRS Taxpayer Advocate, whose job is to take the taxpayer's side at the IRS. (The IRS typically responds to the report at midyear.) And it's only going to get worse. "Given our very limited resources, phone lines will be very busy, and there will frequently be extensive wait times," IRS Commissioner John Koskinen said on the agency's official YouTube video about the 2013 tax year.
And as much as people love to hate the IRS, the agency's problems become taxpayer's problems. Poor customer service means that many more people will pay someone else to do their taxes, which simply becomes another cost of dealing with the federal government. And for some people, the IRS's woes mean that basic mistakes in filing could ultimately become big costs that involve fines, penalties, liens - and hiring people like Bill Nemeth.
IRS customer service has been struggling for the past three years, and the cause is fairly simple: Congress has consistently cut its budget. "Congress doesn't like the IRS," Nemeth says, and Congress is unlikely to get much blowback when it cuts the not exactly beloved agency's budget. While the president requested $340 million in funding for the IRS because of the Affordable Care Act, none of that was funded by Congress. But the IRS has to do what the law requires it to do, Koskinen says. "If other things don't get done, that's what we'll do."
Even without the ACA funding, the cuts have been severe. In the government's budget year 2012, the IRS allotted $172 million to training its customer service representatives, according to the IRS Taxpayer Advocate. The IRS now has $22 million to train those same people - an 87% drop.