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A new report shows that budget cuts at the Internal Revenue Service are responsible for the loss of tens of billions of dollars in corporate tax revenue.
A study from Indiana University Kelley School of Business found that the IRS could have collected at least $34.3 billion more in revenue from large corporations if they had an additional $13.7 billion in resources. That’s nearly 20 percent of the estimated corporate tax gap from 2002 through 2014.
In advocating for increased IRS funding, NTEU has long argued that the IRS generates way more money than it spends. And with the federal debt climbing, adequate funding for the agency is a good investment for the country.
The report attributes the losses in revenue to a reduction in the scope of audits due to fewer staff and resources at the IRS.
The IRS has been the target for budget cuts for years. Since 2010, the IRS has 23,000 fewer employees, making it hard for the agency to maximize taxpayer compliance, prevent tax evasion and reduce the deficit by collecting what is fairly owed. Funding for enforcement activities has been slashed by almost $645 million, which has forced the IRS to reduce overall enforcement staffing by 27 percent, including IRS revenue officers who are critical to IRS enforcement efforts.
NTEU strongly supports an appropriations bill approved by the House that would increase IRS funding by more than $700 million, allowing the agency to restore some of its workforce. The union will continue to strongly support a boost in IRS funding when appropriations work continues on Capitol Hill this fall.