Taxpayer Advocate Calls 2025 Filing Season A Success But Waves Warning Flag On Cuts

Forbes

17 hours ago

WASHINGTON, DC - OCTOBER 07: Erin M. Collins, National Taxpayer Advocate, Taxpayer Advocate Service testify's at the House Committee on Oversight and Reform on October 07, 2020 in Washington, DC. (Photo by) Getty Images
In her introductory remarks to her Annual Report to Congress, Erin Collins, the National Taxpayer Advocate, touted IRS successes following the pandemic, suggesting that the most recent filing season was the 'smoothest yet.' For most Americans, she notes, the annual filing season is the only time they interact with the IRS—that makes it imperative for the IRS to get it right.
Collins says that IRS employees did get it right this year, collecting approximately $5 trillion in revenue, processing around 180 million income tax returns, and over five billion information forms. Most taxpayers filed their returns, paid their taxes, or received their refunds without any delays or intervention from the IRS. That should happen when the system is working. Here's how that looked overall:
Individual Tax Return Statistics Kelly Phillips Erb
In addition, Collins says that there was 'meaningful progress' in improving telephone service. The IRS has met its 85% Level of Service (LOS) goal on its Accounts Management telephone lines for the last three filing seasons, including the current year. The "Level of Service" is the number you get when you divide the number of taxpayers who reach a live assistor by the number of calls the IRS system routes to live assistors.
Phone service is just one piece of the taxpayer experience, which Collins says is driven by personnel and technology. Both are threatened under the new administration.
Like the workforce at many federal agencies, Collins notes that the IRS workforce looks very different today than at the beginning of 2025. Notably, the number of employees has been reduced by over 25%. Here's how that breaks down:
IRS Personnel Cuts Kelly Phillips Erb
Cuts in personnel and the absence of consistent leadership have created 'significant challenges.' That's before the next round of cuts.
The administration's budget proposes a 20% reduction in IRS funding next year and an overall reduction of 37% after accounting for the decrease in supplemental funding from the Inflation Reduction Act. Collins says that is likely to impact taxpayers and potentially the revenue collected. She recommends the current hiring freeze be lifted so that the IRS can hire essential filing season staff to meet taxpayer needs next year. This needs to happen by the end of summer, allowing time for onboarding and training by January.
A successful filing season, Collins says, 'is not only an IRS imperative but also a national one.' With that, she revealed her Taxpayer Advocate Service (TAS) objectives for the year. TAS Objectives
As required by law, the report also identifies TAS's key objectives for the upcoming fiscal year. The report outlines nine systemic advocacy objectives (what the TAS will advocate for with the IRS to enhance tax administration on behalf of taxpayers and address systemic issues that cause taxpayer burden, harm, or a negative impact on taxpayer rights). Here are a few highlights: Improve Automation & Metrics. For the 2025 fiscal year, the IRS estimated it would receive approximately 43 million paper tax returns and 19 million paper information returns, in addition to tens of millions of paper correspondence. Collins has consistently emphasized that paper is the IRS's 'kryptonite,' triggering delays in processing, increasing call volumes, and driving taxpayers to seek answers online or by phone. The IRS must prioritize processing automation, implement more accurate service metrics, and ensure its systems and processes support end-to-end digital processing and resolution to improve the overall taxpayer experience, she says. Expand Online Account Functionality. Taxpayers and tax professionals are looking for self-service options that offer convenience, speed, and accessibility. Collins says the IRS must continue to expand online account tools and digital services to include self-service options for taxpayers. Slash Identity‑Theft Case Timeframes. Tax-related identity theft continues to impact taxpayers. Identity theft victims rely on the IRS to investigate and resolve their identity theft issues before they can receive tax refunds, but there are still 'persistent delays. Despite increased attention to identity theft issues, Collins says the IRS has not made meaningful progress in reducing the case backlog or accelerating case resolution for victims. Case resolution times in fiscal year 2024 averaged two years to complete—in 2025, the average resolution time was about 602 days. Collins wants to see the average resolution time slashed from nearly 20 months to approximately four months. Enhance Oversight of Tax Return Preparers. Unethical tax return preparers—often non-credentialed—exploit taxpayers by promising large refunds through the manipulation of credits and deductions. Insufficient IRS oversight allows these unscrupulous preparers to operate with minimal accountability, writes Collins, who urged stronger oversight, clear communication, and targeted education for preparers. Speed Up CAF Number Suspensions. Authorized taxpayer representatives, including attorneys, certified public accountants, and enrolled agents, serve as advocates for taxpayers. When the IRS suspects that a practitioner has been a victim of fraud, it can suspend their Centralized Authorization File (CAF) number during the investigation (a CAF number is a unique nine-digit identification number assigned to tax professionals and others who file third-party authorizations and allows them to communicate with the IRS on behalf of their clients). Cutting off that access to the IRS harms taxpayers while the IRS investigates. Collins suggests that by issuing interim CAF numbers, improving communication, and reviewing current policies with stakeholder input, the IRS can better strike a balance between fraud prevention and taxpayer rights. Complete ERC Claims Processing. The Employee Retention Credit (ERC) is a refundable tax credit designed to provide financial relief to businesses who kept employees on their payroll during the pandemic. Since the credit became available, the IRS received nearly five million ERC claims, and has either disallowed, reversed, or recaptured approximately 214,000 of these—in addition to imposing a moratorium on claims to stave off the fraud. Collins says IRS must focus on resolving claims efficiently, providing clear and timely communication, addressing responses to the claim disallowances, and safeguarding taxpayer rights. Improve FOIA Request Handling. The Freedom of Information Act (FOIA) allows individuals to request access to documents that the IRS possesses, including administrative files related to taxpayer returns or claims. Taxpayers and tax professionals continue to report ongoing issues with FOIA responses, including lengthy delays, incomplete records, and excessive redactions. Collins suggests modernizing the FOIA processes, reducing processing times, and enhancing guidance for staff. Strengthen Appeals Independence & Efficiency. The IRS's Independent Office of Appeals' mission is to safeguard taxpayer rights by independently and efficiently resolving federal tax disputes, minimizing the need for costly and lengthy litigation. Collins says the IRS should adopt targeted reforms aimed at rebuilding taxpayer trust and safeguarding their rights. Improve Criminal Voluntary Disclosure. The IRS's Criminal Voluntary Disclosure Practice offers taxpayers with potential criminal tax exposure a critical opportunity to self-correct and return to compliance. In return, the IRS gains revenue, closes part of the tax gap, and promotes future compliance. The Advocate recommends that the IRS engage with stakeholders to improve the program's design and simplify the application process, making it more understandable, user-friendly, and transparent. About The Report
The report is one of two that the NTA delivers to Congress each year—one in January and another in June. The NTA leads the Taxpayer Advocate Service (TAS) and delivers the reports to the Senate Finance Committee and the House Ways and Means Committee. Since TAS is an independent organization within the IRS, there is no prior review or comment from the IRS Commissioner, the IRS Oversight Board, the Treasury Secretary, any Treasury officer or employee, or the Office of Management and Budget.
You can read the 2026 report here. About TAS
While it feels like the TAS has been around forever, that's not the case. An early version of the organization emerged in 1979, following the IRS's creation of the Office of the Taxpayer Ombudsman, which was established to serve as the primary advocate within the IRS for taxpayers. That office was eventually codified in the Technical and Miscellaneous Revenue Act of 1988—section 7811 of the tax code granted the Ombudsman the statutory authority to issue Taxpayer Assistance Orders (TAOs) when taxpayers were suffering or about to suffer significant hardships. The law also directed the Ombudsman and the Assistant Commissioner (Taxpayer Services) of the IRS to provide an annual report to Congress on the quality of the IRS's taxpayer services.
Nearly a decade later, in 1996, Congress officially replaced the Ombudsman with the Office of the Taxpayer Advocate, considered the 'voice of the taxpayer.' At the same time, Congress granted the Advocate the authority and responsibility to inform Congress of recurring, unresolved problems and difficulties that taxpayers encounter in dealing with the IRS. The new law also tasked the Advocate with bringing two annual reports to Congress. Those reports are due June 30 (objectives of the Taxpayer Advocate for the coming fiscal year) and December 31 (includes a summary of at least 20 of the Most Serious Problems facing taxpayers) of each year.
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