The IRS: A Labyrinth that would make Daedalus proud

January 23rd, 2025 by Tom Lynch

Background

In Greek mythology, King Minos commissioned the architect Daedalus to design a labyrinth, or maze, in the Palace of Knossos on the island of Crete to imprison the Minotaur, a half man, half bull monster. Minos then fed his enemies to the Minotaur to get rid of them. The hero Theseus killed the Minotaur, and, having been given a spool of thread by Princess Ariadne to unravel on the way in, was able to find his way out.

This is a brief essay on the IRS, where there is no spool of thread, but most certainly a labyrinth.

The hot potato that is the IRS

In 2022, Democrats controlled the House of Representative and passed Joe Biden’s Inflation Reduction Act. The Act included $80 billion to help the I.R.S. hire thousands more employees and update its antiquated technology, which dates from the mid-to-late 1990s. There are IRS tech systems that are not just old enough to vote, they are old enough to run for Congress.

For some reason, this increased funding did not sit well with Republicans. So, when they took control of the House after the 2022 midterm elections, their first piece of legislative business was cutting that $80 billion.

The House did that, but their bill went nowhere in the Senate, controlled by Democrats. But Republicans would get a second chance.

Cutting IRS funding became a central demand of the 2023 debt ceiling negotiation that resulted in clawing back $21 billion from the IRS’s $80 billion. In addition, the debt ceiling negotiation also cost Speaker Kevin McCarthy his job for the sin of negotiating with Democrats.

A big piece of what the IRS wanted to do with the new funding was to improve customer service, making it easier to reach the agency by phone or in person. For instance, the IRS used some of the increased funding to open new Taxpayer Assistance Centers and re-open Centers that had been previously closed due to funding shortages.

Given that our nation and its government run on money and have since the days of Alexander Hamilton, it is bewildering why Republicans are so dedicated to doing away with the one government entity charged with collecting the funds needed to make everything run.

Now enters Elon Musk and the Department of Governmental Efficiency, or DOGE, which, up until now, I thought was the head of the Venetian oligarchy, elected for life by the city-state’s aristocracy. Doges ruled Venice from the 8th century through the Renaissance. Musk wants to be our own personal Doge.

Will Musk and DOGE mount a new assault on IRS funding? In that regard, the first thing the Nazi-saluting owner of X did was ask his social media subscribers. His question on X: “The IRS just said it wants $20B more money. Do you think its budget should be: Increased, Same, Decreased, Deleted?”

Well, what a surprise when 60.6% of more than 212,000 “voters” opted for “Deleted” and nearly 30% said the funding should be decreased. I must say that “deleting” the IRS is one way to make Musk’s assertion he would cut government funding by $2 trillion come true — just don’t collect any taxes.

As we have seen, Republicans not only want to prevent increased funding, they want to cut the funding already there. With that in mind, let me tell you a little story about customer service as it is now.

Welcome to the Labyrinth

The IRS needs money, a lot of it, to improve its customer service. In 2022, the the Agency processed about 165 million tax returns. If only one-half of one percent of taxpayers needed to speak with an agent about their returns, that is 825 thousand calls, or 3,173 calls per every workday. At that rate, given the IRS current staffing, wait times can last hours.

In mid-2024, I needed to speak with the IRS about the taxes my wife and I had filed in April. The issue doesn’t matter. What matters is the whackadoodle adventure of trying to reach someone, a real, live someone, at the IRS.

One can go to any number of websites, including the IRS’s, to discover the correct phone number to call. It’s 800-829-1040. Call it, and the fun begins. The Agency has created an automated phone tree system that rivals the Daedalus Labyrinth. Spend an hour — or more — trying to negotiate the twists and turns, and you’ll end up wanting to drop that high-priced smart phone down the deepest of wells.

Over a couple of months, I tried repeatedly to reach someone. My highly-talented and smart CPA couldn’t even do it. But I was following Calvin Coolidge’s dictum about persistence, so on it went. In the end, I probably would have settled for the Deputy Assistant Janitor.

It was then I discovered my own Princess Ariadne, a kind-hearted and generous CPA named Amy Northard. Northard is CEO of Accountants for Creatives, a CPA firm located in New York City. Recognizing that people like me were wandering around in the IRS phone maze of a wasteland, she decided to do some research, find some answers, and offer help — for free.

Ms. Northard discovered there were 10 steps to negotiating the IRS automated phone system, none of them intuitive, most counterintuitive. In other words, if you followed the phone prompts the automated system provides, you would be bounced around like a bee bee in a boxcar, until a computerized voice eventually said, “Thank you for calling the IRS. Goodbye.” At least it didn’t end with, “Have a nice day.”

I assiduously followed Northard’s advice, and in less than five minutes reached a helpful and apologetic Agent. IRS Agents don’t like what customers have to go through one little bit, but there is nothing they can do about it except be highly helpful when someone eventually reaches them.

Now, my issue is resolved, and it’s time to pay it forward. Here are Amy Northard’s ten steps for reach an IRS Agent.

How do you speak to a live person at the IRS?

  1. The IRS telephone number is 1-800-829-1040.
  2. The first question the automated system will ask you is to choose your language.
  3. Once you’ve set your language, do NOT choose Option 1 (regarding refund info). Choose option 2 for “Personal Income Tax” instead.
  4. Next, press 1 for “form, tax history, or payment”.
  5. Next, press 3 “for all other questions.”
  6. Next, press 2 “for all other questions.”
  7. When the system asks you to enter your SSN or EIN to access your account information, do NOT enter anything.
  8. After it asks twice, you will be prompted with another menu.
  9. Press 2 for personal or individual tax questions.
  10. Finally, press 3 for all other inquiries. The system should then transfer you to an agent.

Got all that? You can thank me later.