The suburban Westchester retiree finally gave up trying to get her tax question answered by calling the IRS hot line.
”It`s terrible over the phone,” she said as she waited at the Internal Revenue Service`s office in Lombard. ”They couldn`t answer any of my questions. I`ve gotten cut off a number of times. It`s a toll-free number, but it is still very aggravating. That`s why I came here.”
So she stood in line only to find that the IRS office didn`t have the tax form she needed.
Taxes probably aren`t at the top of anybody`s recreation list, but there`s an added level of confusion and frustration as the nation wades through the first year of tax reform. Professional tax preparers and the IRS often are as confused as taxpayers.
That fact hit home last week, when the General Accounting Office, the investigative arm of Congress, reported that 39 percent of questions put to the IRS` toll-free help numbers were answered incorrectly.
The IRS said the number was 25 percent, but agreed it was hardly a stellar showing.
”We try not to delude ourselves,” said George Johnson, chief of taxpayer services for the IRS in Chicago.
He estimated that Chicago mirrors the rest of the nation in the percentage of incorrect answers.
”Sure, it`s an issue. I just don`t want it to be bigger than it really is.”
In truth, most of the questions the IRS is answering wrong are unlikely to represent much money, he said. The majority of inquiries are simple procedural questions: who should file, what forms to use, how to handle specific deductions and where to mail it all.
More Top Picks Best Dual Flush Toilets For The Money
Wrong answers become important if they put the taxpayer in a position to owe money to the IRS.
”What we`re talking about here are penalties,” Johnson said. ”Very rarely do we apply a penalty in an audit situation. I don`t want taxpayers to be afraid of a bogyman here about penalties.”
The IRS has declared that it will not assess penalties if it provided incorrect information that caused an error. But the taxpayer will be liable for any additional tax owed, plus interest, if an audit turns up the error.
For the most part, the truly complex issues that can result in big tax liabilities affect high-income people, who rarely turn to the IRS for help, Johnson said.
Their accountants deal with it, but not by standing in line at the IRS or using toll-free numbers.
”If we have a question that people in our practice office can`t address, and if we can`t answer it here, generally we`ll call somebody at the IRS who`s specifically involved in that area, or talk to somebody at the (congressional) Joint Committee on Taxation that wrote that provision,” said Frank Devlin Jr., a tax partner in the Washington office of Deloitte Haskins and Sells, one of the nation`s largest public accounting firms.
But if a question has a Big Eight accounting firm baffled, it often has the IRS baffled, too. ”A lot of times there isn`t an answer,” Devlin said.
”It`s a question that hasn`t been addressed yet.”
In those cases, Deloitte does keep some ammunition. ”Generally, we do keep records when we talk to the IRS,” Devlin said.
People seeking advice in Room 1717 of the Kluczynski Federal Building don`t have a Big Eight accounting firm looking out for them. If a tax return is challenged during an audit, it`s up to the taxpayer to prove the incorrect information came from the IRS.
”How do you document that?” asked Michael McGrail, a spokesman for the IRS in Chicago. ”We haven`t received any specific procedural guidelines from Washington on this.”
But logical steps would be to ask the name of the person who answered the question and to write down the date, question asked and answer received.
Johnson said that since the error rate was made public last week, many IRS helpers are reluctant to give their names. He`s sympathetic, noting that he spent his first year with the IRS answering telephones, too.
”I worried, `If I make a mistake, will I be fired?` ” he said.
If an IRS helper won`t give a full name, ask for the person`s group number, Johnson suggested. Or ask the person to cite the source of the answer. In most cases, the source is likely to be an IRS publication, which is available free to taxpayers, he said.
But at noon one day last week, the line of people waiting to pick up forms and publications snaked around the lobby of the Kluczynski Building. Clerks dashed about plucking requested forms from boxes and files.
Berenice Arnold, one of those clerks, said an average of 1,900 people show up on Mondays and Fridays, and 1,400 to 1,500 in midweek. Six times since late January more than 2,000 people have showed up in a single day, she said. A taxpayer asked Arnold for the publication explaining alternative minimum taxes. Arnold told him no one has the publication yet because the printers made a mistake in it.
Taxpayers have their own systems for beating the error odds.
”I always call three times,” said a Roselle businessman. ”Whichever answer I get two out of three times, that`s the one I use.”
Another taxpayer, Jerome Hillyard, said his visit to the IRS office in Lombard was only a starting point.
”I want to go home and digest what`s accurate and what`s not,” Hillyard said. ”I figure out my taxes myself, and I also go to a tax person. Then I see if we come close.”
The General Accounting Office and the IRS came up with their error estimates by having their own people, posing as taxpayers, call questions into the IRS toll-free numbers. Northern Illinois IRS region managers monitor questions, too, breaking in if they hear an incorrect answer.
It seems to work. Edgardo Afante, 29, a medical student, owes $900 in back taxes and went to the IRS to straighten things out. He was pleasantly surprised when the IRS showed him how to apply to make payments over time.
”They were very decent; it was very good advice,” he said.
Johnson said his mail shows most taxpayers seem happy with the service they`ve received.
”I think that`s unusual,” he said. ”It takes time for the taxpayer to sit down and write a letter. So far this year, I`ve gotten no negative letters from taxpayers, but I`ve gotten maybe 25 to 30 compliments.”
The Tax Reform Act has been referred to, not entirely in jest, as the Tax Accountants` Full Employment Act.
The American Institute of Certified Public Accountants has estimated that, all other things being equal, it will take individuals 10 to 50 percent more time to fill out their returns this year because of the new law. Many people, predictably, have decided to let somebody else do the work.
More Top Picks Samsung Galaxy Watch 5
But that may not make taxpayers happy, either.
”It is taking longer, and it is more complex,” noted Wallace Ducayet, partner in charge of taxes for the accounting firm Price Waterhouse in Chicago. ”It`s obvious, with increased time going in to prepare returns, that there`s going to be fee pressure.”
Cyrus Walker, a CPA with offices in the Loop, says there`s time pressure, too. He sets aside one day a week to research questions and is limiting the number of new clients.
Gwendolyn Dixon, a nurse on Chicago`s South Side, always has gone to H&R Block. This year, after waiting in line for three hours, she was told the firm`s fee for filling out a 1040 form had gone from $20 to $30.
So she headed for the IRS office downtown, where she had to wait only 20 minutes for help filling out her 1040. Dixon believes she got good advice.
”I am surprised,” she said. ”I wish I had come here at the very beginning, when I started working some odd years ago. I`ll probably come back here next year.”