IRS has improved taxpayer services but is slow to resolve ID theft, watchdog says

ABC News - Jan 8th, 2025

The IRS has significantly enhanced taxpayer services, aided by the Inflation Reduction Act's multiyear funding, according to the 2024 annual report by National Taxpayer Advocate Erin M. Collins. Despite these improvements, challenges persist, including delays in resolving identity theft cases and processing Employee Retention Credit claims. The latter, intended to support businesses during the pandemic, has been exploited by fraudsters, leading to a backlog of 1.2 million claims. IRS Commissioner Daniel Werfel acknowledges strides in service but identifies identity theft as a major issue, exacerbated by rising online fraud. The agency is allocating more resources to address these challenges and is refining case management to expedite resolutions.

The IRS's progress is threatened by potential funding cuts following a 2023 budget deal that rescinded $1.4 billion and planned further reductions. While the initial $80 billion boost under the Inflation Reduction Act facilitated service enhancements, ongoing budget constraints could jeopardize these gains. Treasury officials are urging Congress to release $20 billion in enforcement funds currently frozen by legislative stipulations. Collins advocates for protecting taxpayer services and IT funding from cuts, warning against jeopardizing the improvements achieved. The report underscores the critical role of sustained funding in maintaining and advancing IRS capabilities to serve taxpayers effectively.

Congress Fraud Irs Identity Theft Inflation Reduction Act Erin M. Collins Daniel Werfel Employee Retention Credit Taxpayer Services U.S. Tax Court

Story submitted by Fairstory

RATING

7.8

Fair Story

Consider it well-founded

The article provides a comprehensive overview of the IRS's current operational challenges and improvements, particularly in light of funding changes from the Inflation Reduction Act. It is factually accurate and well-supported by specific data points and quotes from credible sources, such as IRS officials and the National Taxpayer Advocate. The article largely maintains balance by presenting multiple perspectives, including those of IRS officials and the National Taxpayer Advocate, though it could benefit from additional viewpoints, such as those of affected taxpayers or businesses. The source quality is high, as it primarily relies on authoritative figures in the tax domain. Transparency is generally good, with clear explanations of claims and methodologies, although further context about the legislative process affecting IRS funding could enhance understanding. The article is well-structured and clear, with a neutral tone, though it could improve clarity by avoiding jargon for a more general audience.

Accuracy

The article is factually accurate, supported by specific data and direct quotes from credible sources such as Erin M. Collins, the National Taxpayer Advocate, and IRS Commissioner Daniel Werfel. For example, the article mentions a backlog of 1.2 million claims and specific delays in identity theft case resolutions, which are detailed in Collins' report. It accurately reports the funding changes due to the Inflation Reduction Act and subsequent legislative agreements, with figures like the $80 billion infusion and the $1.4 billion rescinded. However, the article could benefit from additional verification of the impact these funding changes have on the IRS's processing times and taxpayer services.

Balance

The article presents a generally balanced view by including perspectives from both the IRS and the National Taxpayer Advocate. It highlights the improvements in taxpayer services and the ongoing challenges, such as identity theft and backlog issues. The article quotes Collins acknowledging improvements due to increased funding, while also mentioning potential funding cuts, which adds a layer of depth. However, the article could enhance balance by incorporating perspectives from affected taxpayers or businesses, particularly those dealing with identity theft or delayed claims. Additionally, viewpoints from policymakers involved in the funding decisions could provide a more rounded narrative.

Clarity

The article is well-structured and clear, with a logical flow that guides the reader through the IRS's recent improvements and ongoing challenges. It uses straightforward language and maintains a neutral tone, avoiding emotive language that could bias the reader. Complex information, such as the details of funding changes and their implications, is presented clearly. However, the article could improve by minimizing jargon and technical terms related to IRS operations, which might be challenging for a general audience to understand fully. Simplifying these aspects could enhance overall readability and comprehension.

Source quality

The article relies on high-quality sources, primarily quoting Erin M. Collins, the National Taxpayer Advocate, and IRS Commissioner Daniel Werfel, both of whom are authoritative figures in this context. These sources lend credibility to the article, as they provide firsthand insights into the IRS's operations and challenges. The report mentioned is a credible document, and the details align with known facts about IRS operations and funding issues. However, the article could benefit from a broader range of sources, such as independent tax experts or analysts, to provide additional verification and context.

Transparency

The article is relatively transparent, providing clear explanations of the IRS's challenges and improvements, as well as the legislative context affecting its funding. It explains the basis for claims and includes direct quotes that support the narrative. However, it could improve by offering more context about the legislative process and the specific impacts of budget cuts on IRS operations. Additionally, while it mentions potential conflicts related to funding cuts, it could further explore how these might affect the IRS's ability to maintain service improvements.