January 12,2009

Grassley: IRS Missed Opportunity to Improve Taxpayer Service Using Contractors


To: Reporters and Editors
Fr: Jill Gerber for Sen. Grassley, 202/224-6522
Re: GAO on 2008 tax filing season
Da: Monday, Jan. 12, 2008

Sen. Chuck Grassley, ranking member of the Committee on Finance, with Senate
jurisdiction over taxes, today made the following comment on a report from the
Government Accountability Office, GAO-09-146, “Tax Administration: IRS's 2008
Filing Season Generally Successful Despite Challenges, Although IRS Could Expand
Enforcement During Returns Processing.” The report is available at

“The IRS did a lot things right in the filing season, even with the added challenge
of getting out stimulus payments. However, there are some lessons to be learned and
applied to the next filing season. The agency didn’t collect $655 million because it
pulled personnel from collections to staff phones to answer stimulus calls. That shift still
wasn’t enough, and some taxpayers didn’t get their calls answered. Because of the quick
timing of stimulus, the IRS couldn’t hire and train phone people quickly enough.
However, the IRS could have made more use of the private contractors that exist just to
make calls to taxpayers who owe money. This would have reduced the cost of using IRS
collections staff to take stimulus calls.

“The IRS immediately should implement both recommendations to increase its
use of Math Error Authority. By using this authority, the IRS could do more to identify
and inform taxpayers who are not claiming credits for which they’re eligible, such as the
child and dependent care credits. Also, the IRS could use this authority to disallow
earned income tax credit claims by noncustodial parents, which appears to be a very big
problem. Taxpayers should pay exactly what they owe, not a penny more or penny less.
The IRS needs to help taxpayers get it right. If the IRS needs legislation to use additional
Math Error Authority as recommended by the GAO or to improve its guidance to
taxpayers and tax return accuracy, the agency should make the case for that. I’ll listen
and if legislation is needed, will work to make it happen.”