Tax chiefs have apologised to customers for huge delays in dealing with queries - admitting that it "simply wasn't good enough".
Mike Clasper, chairman of HM Revenue & Customs (HMRC), said the organisation had been "overwhelmed" in 2010 but insisted improvements have been made this year.
It follows a damning report by the Treasury Select Committee that found a raft of problems with the department, including "endemic" delays in answering letters and failing to answer phone calls.
Mr Clasper said: "We are not happy with our performance in 2010. It simply wasn't good enough on post and telephone and I'd like to take the opportunity to apologise to the people who had to take a long time to get through, or we didn't get back to them quick enough with the post.
"In 2011 we've been working very very hard to improve things. We're handling the calls immediately much more frequently than we did in 2010 and as far as individual customers are concerned you know the post levels have dropped in half," he told BBC Radio 5 Live.
But George Mudie, a member of the Treasury Select Committee, warned continued job cuts at HMRC would make it difficult to resolve problems. He told BBC Radio 4: "With the cuts of staff that are imminent and have been going on for five years we are hard pushed to see how they can improve this. Because of the cuts and rationalisation they have closed over 200 offices. That's cut down on the face-to-face contact taxpayers can have with the department."
MPs found there was an overwhelmingly negative attitude towards management and organisational change. They added that "relentless negative publicity has further harmed engagement and morale". But the committee said any organisation facing the "constant job losses" that HMRC had endured over the last five years would "experience problems with staff engagement".
The report added: "HMRC's delivery of services to the general public has fallen to unacceptable levels in several areas. There is considerable dissatisfaction among the public and tax professionals with the service provided by the department."
MPs made a series of recommendations for the organisation, including rapidly improving its phone service, particularly in relation to complex queries, and looking into providing alternatives to 0845 numbers. They also advocated drawing up minimum service standards for dealing with post "in a timely and accurate fashion".
HMRC says it has recruited 1,000 extra contact centre advisers to handle calls during "exceptionally busy periods".