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Washington, D.C.—Budget cuts and a shrinking workforce are making the Internal Revenue Service (IRS) choose between competing—and essential—functions and that is a powerful warning about the impact of failing to provide adequate resources for this key agency, the leader of the union representing IRS employees said today.

“The IRS workforce has declined by 9 percent, or roughly 10,000 employees, from 2010 alone,” said President Colleen M. Kelley of the National Treasury Employees Union (NTEU), citing a recent report by the Treasury Inspector General for Tax Administration (TIGTA). The IRS is working this tax-filing season with 5,000 fewer employees than a year ago, raising the prospect of delayed refunds.

As NTEU has long argued, the TIGTA report emphasizes that while the IRS is facing lower staffing levels, the work performed by its employees is become increasingly complex.

TITGA warned that budget pressures and fewer personnel could jeopardize the agency’s fraud-detection and identity theft teams. “As tax season ramps up,” TIGTA said, “many employees formerly tasked with handling these specific areas also are being asked to man the telephones to assist taxpayers with questions.”

On that point, Kelley said “there is simply no justification for creating the circumstances in which the IRS should have to choose between meeting its responsibilities to assist taxpayers and fighting identity theft and tax fraud. Forcing choices like that inevitably result in serious costs for our nation.”

Additionally, President Kelley noted that about 40 percent of the IRS’s workforce will be eligible for retirement within five years. “The work is becoming more complex at the same time the IRS is facing the loss of significant numbers of talented, highly-experienced employees whose position are not being backfilled,” she said.

The NTEU leader also underscored the dangers of looming sequestration slated for March 1, which would reduce agency budgets by at least another 8 percent. A report to Congress just last month from National Taxpayer Advocate Nina Olson identified chronic underfunding as one of the IRS’s top priorities. That is particularly troublesome for the IRS, inasmuch as it collects some 93 percent of all government revenue. Underfunding the agency threatens such vital services as border security, food safety and much more, Kelley said.

NTEU is the largest independent federal union, representing 150,000 employees in 31 agencies and departments.