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| The Basics | Can you turn to the IRS for tax help?
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The IRS has many places you can go for tax help, but be cautious. Surveys suggest the answers you get may not be accurate.
By Jeff Schnepper
The IRS can provide a lot of help. The real question lies in the quality of that help.
Two decades ago, Ralph Nader's Tax Reform Research Group prepared 22 identical tax reports based on the fictional economic plight of a married couple with one child. Identical copies were submitted to 22 different IRS offices around the country.
Each office came up with an entirely different tax figure. Results varied from a refund of $811.96 recommended in Flushing, N.Y., to a tax-due figure of $52.13 demanded by the IRS office in Portland, Ore.
Was that help? Well, it did get me to thinking about moving to Flushing.
My favorite IRS tax aid is the phone numbers they provided in two 2001 publications. Call and you were referred to adult chat lines.
The IRS can help. Need a tax form? No problem. You can get them viaMSN Money or at the IRS Web site. Call (703) 368-9694 and have a fax machine ready, and you can get forms faxed back to you. No fax machine? Just call (800) TAX-FORM and the IRS will mail them to you. You can even get Braille tax products at that number.
You can hear recorded messages on about 150 tax topics by calling (800) 829-4477. If you need an Employer Identification Number, you can get one immediately by calling (800) 829-4933. Have a question you need to talk to someone about? Call the Tax Help Line at (800) 829-1040.
A spotty record on service and accuracy
But here's where it may become sticky. In reviewing the IRS' 2002 tax season, the General Accounting Office reported that IRS customer service representatives answered 1.6 million more calls than the prior year. That, however, was 2.6 million calls less than the agency's goal.
Phone service got better in 2003. The IRS provided 872,000 more toll-free services than in 2002. But 6.7 million taxpayers were disconnected. According to former House Ways and Means Committee Oversight Subcommittee Chairman, J.J. Pickle of Texas, "Calling the IRS for tax advice is a real crapshoot."
Things weren't much better if you came in person. The IRS has over 400 offices nationwide where you can walk in and get help. They're called Taxpayer Assistance Centers, and you can find the one closest to you by calling (800) 829-1040.
Here again, you're dealing with people who are supposed to know the law. Unfortunately, you may have a better shot at finding the right answer in the MSN Money Tax Corner community.
In a 2005 test of the system by the Treasury Inspector General, 35% of answers were incorrect. The Treasury Inspector General tested the system again to measure the quality of the taxpayer assistance during the 2005 filing season.
The bad news, according to a Nov. 15 Government Accountability Office report: The accuracy rate for responding to tax law questions was basically unchanged from 2004.
The poor performance was attributed to the representatives not using the prepared guide scripts or not interpreting the law correctly.
Not interpreting the law correctly is what defines a wrong answer.
The IRS is not alone
It's easy to find fault with the IRS help. In all fairness, that's not the full story. Our tax code is so complicated and convoluted that even many professionals fail to get the right answer.
Since 1988, Money magazine has conducted an annual study where 50 tax professionals, including attorneys and certified public accountants, have been asked to complete a tax return for a hypothetical family.
The results have been unnerving. The professional preparers come up with different results each year -- with spreads of as much as $1,000.
So let's see where we are. The IRS can't get the answers right. Neither can the professionals. That may explain why there have been U.S. Supreme Court tax cases where as many as four of the justices got the answer "wrong."
That's the good news. The bad news is that IRS advice is not binding -- whether given in person or in print. You also can't rely on IRS publications, even the famed Publication 17, Your Federal Income Tax. If there's a mistake in print -- tough!
Thankfully, during the Reagan administration, then-IRS Commissioner Lawrence Gibbs initiated a policy where penalties would not be imposed on taxpayers who relied on incorrect information from IRS telephone taxpayer assistance personnel. That's just the penalties, not the tax itself. And you've got the burden of maintaining a record of the name of the IRS employee who supplied the incorrect information and the date of the conversation.
Where does this leave the taxpayer?
The IRS cant get it right and the pros arent much better. Where does that leave you as a taxpayer?
Thats one reason MSN Money has the Tax Corner message board.
The real answer, however, is Tax Code simplification.
Until then, as a taxpayer, youll have to take your shot. Ask the IRS and ask the pros. How aggressive are you? How much risk can you sleep with? I have a friend who takes the position, When in doubt, deduct it out!
Let your Congressional representatives know about your displeasure. But, in the meantime, dont hesitate to use the resources available to you.
The IRS has a compilation of free tax services in Publication 910. It details all of the possible free taxpayer-assistance services available. The IRS Web site is also the source of forms and tax-law analysis. In fact, the site is so good and extensive, it's almost as good as the one you're on now!
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MSN Money's editorial goal is to provide a forum for personal finance and investment ideas. Our articles, columns, message board posts and other features should not be construed as investment advice, nor does their appearance imply an endorsement by Microsoft of any specific security or trading strategy. An investor's best course of action must be based on individual circumstances.
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