IRS Budget Proposal Would Devastate Agency, NTEU Warns

Press Release June 17, 2015

Washington, D.C.—The leader of the National Treasury Employees Union (NTEU) said she is deeply disappointed with the devastating cuts to the Internal Revenue Service (IRS) approved today by a House committee.

“This is a draconian budget bill that will make it extraordinarily difficult for the IRS to provide taxpayer assistance and meet its overriding mission of enforcing the tax code,” said NTEU President Colleen M. Kelley. “NTEU will urge Congress to reject this spending plan.”

The House Appropriations Committee adopted a fiscal year (FY) 2016 budget proposal that would provide the IRS with a budget of $10.1 billion—$838 million less than the current level and $2.8 billion below the administration’s FY16 proposal.

The House proposal’s funding level, in real terms, is smaller than IRS’ budget in FY 1991, when the tax code was far less complicated and the country had 38 million fewer individual taxpayers, according to the Office of Management and Budget (OMB).

“The IRS is already struggling to execute its mission because Congress has cut its budget by $1.2 billion in the past five years. Enough is enough. The IRS cannot sustain more cuts,” President Kelley said. “This bill would further erode the IRS’ ability to combat identity fraud, collect more tax revenue and improve taxpayer services.”

In a letter NTEU sent to the appropriators ahead of today’s vote, President Kelley warned that the House proposal would further degrade the IRS’ “already impaired ability to provide taxpayers with the assistance they need and fairly enforce the tax laws enacted by Congress.”

Under the plan, the IRS’ operations support and Business Systems Modernization programs would be slashed by $338 million and $40 million, respectively, and enforcement programs would get $538 million less than now. That would weaken the IRS’ hand in cracking down on the growing problem of identity theft and prevent the agency from collecting an estimated $12 billion in tax revenue next year, according to a letter sent to the committee by OMB.

Though the House bill proposes shifting $75 million from other IRS programs to improve IRS telephone customer service and fight ID theft among other things, the funding would be “woefully inadequate,” Kelley wrote.

The 2015 filing season was among the worst in the agency’s history in terms of taxpayer assistance. For example, due to staffing shortages, the IRS was able to answer fewer than 40 percent of taxpayer calls. Skeletal staffing at walk-in centers across the country led to record waits and long lines for taxpayers.

The Obama administration requested a $101 million increase for identity theft-related tax fraud alone and a $252 million increase for taxpayer services in FY16. NTEU supports that level of funding for the IRS, which has been forced to cut its full- and part-time workforce by more than 18,000 employees since 2011.

President Kelley also noted in her letter that the National Taxpayer Advocate, the IRS Oversight Board, the Government Accountability Office, the Treasury Inspector General for Tax Administration and others have warned of the negative consequences of chronic IRS budget cuts.

“Congress needs to provide the IRS with the resources necessary to carry out the responsibilities Congress has imposed on it,” the NTEU leader said.

NTEU, the nation’s largest independent federal union, represents 150,000 employees in 31 agencies and departments.

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