Tax Law Center Blog

The operational landscape of the IRS has shifted dramatically in recent months, with a significant reduction in its workforce. This change, driven by broader government-wide initiatives, presents a new set of challenges for tax professionals. By adapting to this new environment and leveraging available digital tools, you can continue to serve your clients effectively.

According to a report by the Treasury Inspector General for Tax Administration (TIGTA), the IRS workforce has been reduced by approximately 25% since the beginning of the year. This includes over 25,000 employees who have left the agency through various separation programs. The impact has not been uniform, with some key divisions experiencing a particularly high rate of attrition:

• Small Business/Self-Employed (SB/SE): This division saw a 35% reduction in its workforce, a change that could affect compliance and audit activities for a large segment of taxpayers.
• Taxpayer Services: With a 20% reduction in staff, this division is likely to face continued strain on its ability to provide timely phone and in-person assistance.
• Information Technology (IT): The IT unit has also lost a quarter of its staff, which may impact the agency’s modernization efforts.

In this evolving environment, the most efficient way to manage your practice is by minimizing reliance on traditional, paper-based processes and phone communication. We recommend the following best practices:

• Embrace Online Tools: The IRS has made significant investments in its online platforms. Utilize the IRS Tax Pro Account to manage client authorizations, view tax information, and submit power of attorney (Form 2848) and tax information authorization (Form 8821) requests electronically. This can shorten processing times and eliminate the need for faxes or mail.
• Use the Transcript Delivery System (TDS): Instead of requesting client information by mail or through a phone call, use the TDS within the IRS e-Services suite. This tool allows authorized practitioners to quickly and securely obtain client transcripts and other tax records.
• Prioritize Electronic Filing: Electronic filing remains the most efficient way to submit returns. The IRS prioritizes e-filed returns, which are processed automatically and have fewer errors. Encourage all eligible clients to file electronically.
• Utilize the IRS Document Upload Tool: When responding to an IRS notice or letter, use the secure online Document Upload Tool to send your documents directly to the agency. This is more reliable and traceable than traditional mail.

By strategically using these digital tools, you can bypass potential delays associated with paper processing and limited phone support.

Contact us for a consultation to discuss how our firm can assist you with complex tax problems and help you and your clients navigate these changes.