IRS Should Replace ‘Misleading’ Level of Service Metric, NTA Says

The measure the IRS has used for over two decades to evaluate its telephone service does not accurately “reflect the taxpayer experience,” leading to “inappropriate priorities and a misallocation of resources,” according to National Taxpayer Advocate Erin Collins. (IR 2024-173, 6/26/2024)

In her statutorily required mid-year report to Congress for fiscal year 2025, Collins said the “Customer Service Representative Level of Service” (LOS) performance benchmark is “arbitrary” and “misleading,” and called for the IRS to move on from the measure. While the agency uses LOS to broadly assess taxpayer service, Collins argued it is merely a “check-the-box” barometer that does not paint a full picture.

LOS is determined by the percentage of phone calls answered by IRS employees divided by the number of calls routed to IRS employees. It only tracks telephone calls directed to IRS Account Management (AM) lines. According to the NTA’s report, the IRS received 39.9 million calls during the 2024 tax filing season and 10.3 million AM calls were routed to customer service representatives, who answered 9 million calls. Based on only AM calls, the IRS achieved a LOS of 88%. But the “LOS calculation reflects just over 25 percent of the calls the IRS received and ignores the other 75 percent,” wrote Collins.

The 75% of the calls not included in the LOS calculation include those sent to non-AM lines, disconnections, and automated responses. “Overall, CSRs answered only 32 percent (not 88 percent) of all calls directed to the AM telephone lines,” read the report. Moreso, the IRS’ target LOS goal of 85% only applies during the filing season. In fiscal year 2023, the LOS fell off from 85% during the tax season to 40% for the rest of the year.

IRS and Treasury officials have lauded improvements made to call wait times during the most recent two filing seasons in which thousands of new customer service representatives were hired using funds from the Inflation Reduction Act (PL 117-169). This year’s filing season saw an average hold time of three minutes for AM lines, but non-AM lines had an average hold time of 21 minutes. Collins commended the IRS for the “huge improvement” made to AM wait times, but “the experience was very different for the 12 million calls received on other telephone lines, where the LOS averaged 36% … and only 29 percent of callers spoke with an employee.”

Further, the LOS does not account for whether taxpayers were able to resolve problems with their accounts, she continued. By focusing solely on answering AM calls to boost the LOS, processing times for taxpayer correspondence suffers.

“At the end of the 2024 filing season, 66 percent of the 6.8 million pieces of taxpayer correspondence and cases in AM inventory were overaged, as compared with 61 percent at the same point during the prior year,” said Collins. She concluded that the IRS struggles with balancing employee workflows, as reflected by the 1.1 million hours (29%) of “unproductive employee time that could have been spent processing taxpayer correspondence and amended returns.”