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IRS cuts back on live help for filers

The Internal Revenue Service kicked off tax season with a few blunt warnings. Don't expect to get an answer on the phone much more quickly than last year. And seniors and lower-income households need to look elsewhere if they once went to IRS walk-in locations for assistance in preparing their returns.

IRS Commissioner John Koskinen said in a phone conference that he does not want to see millions of phone calls go unanswered or any taxpayers waiting on the phone for up to a half hour. But he noted that budget cuts and staff reductions will continue to make it challenging for the IRS.

Nearly 40 percent of customer service phone calls to the IRS went unanswered last year, according to the nation's taxpayer advocate's annual report released in January.

The IRS receives more than 100 million phone calls annually.

I ran a quick test of the service on Jan. 31, the first day the IRS began accepting returns for this tax season. I called the IRS' main number, 800-829-1040. During the first call, I had to listen to several prompts and push the appropriate buttons to connect me with someone to answer my question. I did get a live person in two minutes or so. I said I had a question on dependent care and then that person said they'd transfer me to the area handling such calls. After I was transferred, I heard a recording that said the IRS wasn't answering questions on dependent care and then the call disconnected. The whole process was less than five minutes, but I didn't get any tax help, either.

I then called again to ask a question about the education credit. Again, I was transferred to someone handling those questions and I was told the wait would be 8 to 10 minutes. I set the timer. It went off at 10 minutes and that's about the same time someone answered the phone.

But once the friendly woman talked to me, she had to tell me that the server was down and she couldn't answer my questions. She suggested calling back any time between 7 a.m. to 7 p.m.

Another option: She said go to IRS.gov and put "ITA" in the search bar. That's for interactive tax assistance. Later, I could click on the tax topic and begin an interactive search that would walk me through the same questions online about the education credits that the woman said she would have asked me over the phone.

For many consumers with questions, the best way to start could be to go online. The IRS.gov site can link lower-income taxpayers to volunteer sites for tax help, too.

This year, the IRS is cutting out its special service for assisting seniors and lower-income taxpayers with preparing their returns at IRS walk-in Taxpayer Assistance Centers. In 2012, the IRS assisted 6.8 million taxpayers at 397 Taxpayer Assistance sites.

Tax filers who once used the Taxpayer Assistance Centers were sent postcards to alert them that the service was being discontinued. The centers remain open but offer other services.

Koskinen said he's not happy that the IRS cannot provide the tax preparation service any longer, but he noted that the IRS budget is in "post-sequester" mode. He said the agency has 8,000 fewer employees than in 2010.

Consumers can use IRS.gov to find answers and obtain documents, including past records of tax returns. See http://www.irs.gov/Individuals/Get-Transcript.

Lower-income households can also tap into free help from volunteer tax assistance programs, where more than 90,000 volunteers nationwide will prepare and file tax returns for free.

Again, IRS.gov offers help in finding locations. Eligible taxpayers can go to the VITA Site Locator tool to find one of nearly 13,000 community-based volunteer tax sites.

The IRS used the kickoff of tax season to once again remind lower-income households of the advantages of claiming the Earned Income Tax Credit.

The credit is aimed at working individuals and families who earned $51,567 or less last year. About four out of five eligible workers and families get the credit. The amount of the credit varies significantly by income, family size and filing status.

But the IRS said millions of people miss the credit each year because they don't claim it when filing or don't file a tax return at all.

Koskinen said that some tax filers see their situations change, such as a change in marital status or having another child, and the credit must be calculated based on that new situation.

Koskinen said consumers can find out about the Earned Income Tax Credit by visiting IRS.gov, or using the Free File service at the IRS site.

Susan Tompor is the personal finance columnist for the Detroit Free Press.