Bill Overview
Title: IRS Customer Service and Modernization Act of 2022
Description: This bill requires the Internal Revenue Service to (1) develop a written corrective action plan to improve tax return processing times, and (2) adopt measures to improve communication with the public.
Sponsors: Rep. Bice, Stephanie I. [R-OK-5]
Target Audience
Population: Individuals who file taxes in the United States
Estimated Size: 170000000
- The IRS is responsible for tax collection and tax law enforcement in the United States.
- Improvement in IRS customer service will directly impact all individuals who file federal taxes, as they may require assistance or information from the IRS.
- In 2021, around 170 million individual income tax returns were filed, representing a significant portion of the US adult population.
- Improved communication and processing can potentially benefit anyone who interacts with the IRS, including taxpayers seeking to understand their obligations or receive their tax refunds.
- Efficiencies in tax processing and communication could enhance taxpayer experience, particularly during tax season.
Reasoning
- The policy targets a very large portion of the US population, specifically tax filers, which is about 170 million people, thus ensuring our interviews reflect a diverse subset of this population.
- The limited initial budget of $500 million in year one necessitates a focus on cost-effective improvements that benefit a wide array of tax filers, especially during tax season when demand for customer service is highest.
- The policy's long-term budget of over $2.7 billion over ten years indicates a need for sustained impact and progressive enhancements to IRS systems and taxpayer interactions.
- Recognizing varied experiences based on location, occupation, and tax complexity, the interviews should span different groups to see how they perceive and potentially benefit from this policy.
- The potential improvements in processing and communication could significantly lift Cantril wellbeing scores by reducing stress and improving financial clarity and timeliness of refunds for taxpayers.
Simulated Interviews
Software Engineer (San Francisco, CA)
Age: 29 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 10.0 years
Commonness: 7/20
Statement of Opinion:
- The delays in processing returns last year were frustrating, and a better system would definitely ease my stress.
- As someone new to freelancing, I often have questions about deductions.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 8 | 6 |
| Year 10 | 8 | 5 |
| Year 20 | 8 | 5 |
Small Business Owner (Columbus, OH)
Age: 45 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 15.0 years
Commonness: 4/20
Statement of Opinion:
- Improved processing times would be a game-changer for cash flow management and business planning.
- We need clear communication channels for businesses, not just individuals.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 8 | 6 |
| Year 3 | 8 | 5 |
| Year 5 | 9 | 5 |
| Year 10 | 9 | 4 |
| Year 20 | 9 | 3 |
Artist (Santa Fe, NM)
Age: 38 | Gender: other
Wellbeing Before Policy: 5
Duration of Impact: 10.0 years
Commonness: 5/20
Statement of Opinion:
- Better IRS communication would relieve a lot of stress, especially regarding my odd income patterns.
- Unclear guidelines have always been a challenge.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 6 | 5 |
| Year 3 | 7 | 5 |
| Year 5 | 7 | 4 |
| Year 10 | 7 | 4 |
| Year 20 | 7 | 3 |
Retired (Miami, FL)
Age: 65 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 8.0 years
Commonness: 10/20
Statement of Opinion:
- Faster refunds on overpaid taxes would ease my budgeting concerns.
- I need simplified instructions and easy access to answers.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 8 | 6 |
| Year 10 | 8 | 5 |
| Year 20 | 8 | 5 |
Construction Worker (Houston, TX)
Age: 50 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 12.0 years
Commonness: 8/20
Statement of Opinion:
- Quicker refunds will help me plan family expenses better each year.
- It’s hard to get through to the IRS when I have questions.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 8 | 6 |
| Year 5 | 8 | 5 |
| Year 10 | 8 | 5 |
| Year 20 | 8 | 4 |
Stay-at-home Parent (Seattle, WA)
Age: 34 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 10.0 years
Commonness: 9/20
Statement of Opinion:
- The annual tax refund is a crucial part of our yearly planning.
- I've struggled with long waiting times and lack of clear guidance from the IRS.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 7 | 5 |
| Year 3 | 7 | 5 |
| Year 5 | 7 | 4 |
| Year 10 | 7 | 4 |
| Year 20 | 7 | 3 |
College Student (Chicago, IL)
Age: 21 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 5.0 years
Commonness: 11/20
Statement of Opinion:
- As a first-time taxpayer, clearer information and quicker response times would be beneficial for learning the process.
- I worry about making mistakes on my return.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 7 | 6 |
| Year 10 | 7 | 5 |
| Year 20 | 6 | 5 |
CPA (New York, NY)
Age: 60 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 10.0 years
Commonness: 6/20
Statement of Opinion:
- Modernization is overdue and could greatly ease the workload and stress during the busy season.
- Timely responses to inquiries could streamline the tax preparation process for my clientele.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 7 |
| Year 2 | 8 | 7 |
| Year 3 | 9 | 7 |
| Year 5 | 9 | 6 |
| Year 10 | 9 | 6 |
| Year 20 | 9 | 5 |
Teacher (Detroit, MI)
Age: 53 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 10.0 years
Commonness: 8/20
Statement of Opinion:
- Streamlined processing times would mean faster refunds, critical for managing dependent care costs.
- The current complexity of IRS interfaces is daunting.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 8 | 6 |
| Year 5 | 8 | 5 |
| Year 10 | 8 | 5 |
| Year 20 | 8 | 4 |
Gig Worker (Denver, CO)
Age: 40 | Gender: other
Wellbeing Before Policy: 5
Duration of Impact: 15.0 years
Commonness: 6/20
Statement of Opinion:
- The unpredictability in the current IRS processing impacts my budgeting.
- Detailed and swift communication would be a relief.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 6 | 5 |
| Year 3 | 7 | 5 |
| Year 5 | 8 | 5 |
| Year 10 | 8 | 4 |
| Year 20 | 8 | 4 |
Cost Estimates
Year 1: $500000000 (Low: $400000000, High: $600000000)
Year 2: $450000000 (Low: $350000000, High: $550000000)
Year 3: $300000000 (Low: $250000000, High: $400000000)
Year 5: $250000000 (Low: $200000000, High: $350000000)
Year 10: $150000000 (Low: $100000000, High: $250000000)
Year 100: $50000000 (Low: $30000000, High: $100000000)
Key Considerations
- The initial costs are significant, but are intended to be offset by long-term efficiency gains.
- Modernized IT systems can reduce error rates, improve compliance, and potentially increase tax revenue.
- Investment in customer service staff may increase short-term costs but should improve public perception and compliance.
- The policy's success heavily depends on effective implementation and ongoing support.