Yikes. I went through the same thing that Walgamuth went through with the crediting to the wrong account. Although in that case, it was arguably my fault, since my written social security number had an unclear number on it.

Same deal, took almost 2 years to resolve, and I kept getting all kinds of nasty letters. Sounds like you had the same mail problem though, even after the E-file issue. In the end cost a number of thousand dollars out of my pocket. So far, E-filing has been the way to go for me though, it removes sending mail into the IRS and partially eliminates dealing with actual people who as Walgamuth says, just don't care and have a drone like mentality. The kind of people you find in any bureaucracy, ive dealt with plenty of the same obstructionist useless people in the private sector also.

Funny how 90% of incoming mail seems to get misplaced, yet they have no problem quickly mailing out collections and threat letters! Shows the difference in efficiency between the two departments! I bet you anything all your letters arrived on time and to the correct department, and then sat in an in box for months on someones desk.

E-filing, if it works properly and accepted, jumps past the first level of bureaucracy and goes directly into the computer system. Once its there, I figure most drone like people just do what the computer systems say to do, so you avoid the mail center entirely.

Concerning the OPs original comment though, I actually doubt more or less money to the government would have large effect on a bureaucratic process that has been honed over the years. Honestly, what really needs to happen is a more performance and rewards based system for IRS employees.
Say for example, if there was some chance of getting fired for "losing" a certain number of tax returns, or sitting on your ass playing tetris for 8 hours instead of your job, or a more intensive analysis of performance, it might weed out a lot of totally useless people, and people with more initiative could rise easier. Maybe they could try to attract more intelligent employees, or change the image (if possible). You can see how drone like people migrate to the IRS, who in 9th grades says "I want to be an IRS auditor!"
They could have an outsourcing program which moves useless IRS employees into more meaningful easy jobs for them, like handing out thruway tickets in NY state. (Yes, unbelievably, we still have people sitting in a booth handing out tickets, in many cases, not even making change)

Personally, If I spent 8 hours handing people tickets, I would kill myself. Another possible perk to moving them there.

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