By Fergus Hodgson

The Internal Revenue Service is overwhelmed and barely maintaining the façade that it has any concern for taxpayer needs. Albeit with measured, dispassionate language, Treasury Inspector General for Tax Administration J. Russell George made this known beyond doubt in his testimony on March 8 to the US Senate.

The 24-page overview makes for painful reading, but he wrote it to be as “independent” and objective as possible. Here are the key insights that convey the lack of accountability to constituents.

1. No one is answering the phone. As reported in the Washington Free Beacon, in the 2015 tax season only 10 percent of callers got an answer, and after an average wait of 24 minutes. That translates to 75 million missed calls in 2015, and 34 million missed calls thus far in 2016.

2. If they think it is on the website, don’t bother asking them to explain it. The IRS’s admitted strategy is to deal with fewer people, and they have restructured their Taxpayer Assistance Centers not to accept or clarify concerns that “can be obtained through other service channels, such as the IRS’s website.”

3. They conduct fewer services, but charge for the same labor hours. Cost-cutting was the stated justification for the narrowing of services to taxpayers, yet Inspector George notes no substantial reduction in employees or hours billed in the Taxpayer Assistance Centers. Nor did the IRS even “show the extent to which the service cuts would lower the costs.”

4. The IRS admits to giving US$3.1 billion in refunds to the wrong people in 2014. Only God knows what the real number is — no doubt far higher — but the treasury inspector has “continued to identify large volumes of undetected potentially fraudulent tax returns with tax refunds issued to the same address or deposited into the same bank account.”

5. Their “security” measures lead to refunds not being sent at all. After being alerted of the multiple-refunds problem, the IRS simply opted to send checks instead of direct deposits. How that saves money or prevents fraudulent claims is unclear, but “programming errors resulted in some direct deposit refunds not converting to a paper check as required.”

6. Victims of identity theft wait on average of 300 days for resolution. Those delays may frustrate the victims, but 10-17 percent of cases have to be reopened, since the initial resolution is found to be an error.

7. A key source of identity theft is the IRS itself. As of late 2015, at least 700,000 people had their personal information stolen directly from the IRS “Get Transcript” application. But it gets worse: the treasury inspector says the actual number of individuals to suffer the attack is “significantly larger,” because “these tax accounts include certain information on other individuals listed on a tax return (e.g., spouses and dependents).”

8. The IRS seeks foreign compliance with programs it cannot communicate. By way of the Foreign Account Tax Compliance Act (FATCA), the IRS is exporting its regulatory burden to financial institutions that simply contract with US citizens. The treasury inspector notes that their inability to explain and manage this means they are developing the “Foreign Financial Institution Registration System.” But even the buttressed approach does “not timely identify or communicate system design changes necessary to ensure its successful deployment.” Not surprisingly, the cost of compliance means that foreign banks are simply turning away US clients.

The testimony addresses many other concerns and gets into the weeds of budget needs and touted control measures — including Obamacare subsidies and enforcement, which “will continue to present numerous challenges.” However, above all, his overview explains that there can be no new coat of paint. The symptoms are too numerous and point to deeper problems of incentives and accountability.