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Washington, D.C. –The leader of the union representing the Internal Revenue Service (IRS) workforce said today she strongly supports the conclusion in the annual report of the National Taxpayer Advocate that the most serious problem facing taxpayers is that the IRS is inadequately funded to fully perform its vital mission for the nation.

“The National Treasury Employees Union (NTEU) has argued consistently that funding the IRS is not a cost, it is an investment that pays significant dividends for our country,” said NTEU President Colleen M. Kelley. “This report reconfirms that important principle.”

Taxpayer Advocate Nina Olson emphasized the folly of underfunding the IRS by pointing out that in fiscal 2011, “for every dollar that Congress appropriated for the IRS, the IRS collected about $200 in return.”

“That return on investment sharply underscores the reality that IRS employees are best-positioned and best-trained to do the revenue collection work of America,” President Kelley said. Overall, the IRS collects some 93 percent of total federal revenue, funding most government agencies.

In her report to Congress, Olson described as the overriding challenge facing the IRS the fact that its workload has grown significantly in recent years while agency funding is being cut.

A significant impact on the IRS workload is the surge in tax-related identity theft, in which stolen social security numbers (SSNs) are used by thieves to file returns that claim refunds. Those tax returns are generally filed very early in the tax season, according to the taxpayer advocate, so by the time a valid return is filed by a taxpayer with a legitimate claim to that SSN, the IRS blocks the return because the SSN has already been used in that tax year.

Olson said the IRS has identified more than 404,000 taxpayers who have been affected by identity theft since 2008, and in fiscal 2011, the IRS unit dealing with that issue received more than 226,000 cases, a 20 percent increase over the previous year.

Despite a marked increase in taxpayers victimized by tax-related identity theft, Olson notes that the IRS does not have sufficient personnel in place to help victims. “The process of assisting identity theft victims cannot generally be automated. IRS personnel must work directly with victims to understand what has happened, verify that they are the correct taxpayers, and take the actions required to resolve their problems,” Olson writes in the annual report.

“If you are one of those many thousands of individuals affected by identity theft, you surely would want a trained IRS employee to help make this life-changing situation right,” President Kelley said. She added that IRS employees who work with identity theft victims are dedicated federal workers who often do not have the resources they need to adequately help people caught in that unfortunate situation.

Olson’s report noted that current federal budgeting rules do not take into account that a dollar appropriated for the IRS typically generates more than a dollar in additional tax collections. That, she added, leaves the agency “substantially underfunded to do its job and limiting its ability to close the tax gap and thereby help reduce the federal budget deficit.”

For that reason, she called on Congress to develop new budget procedures designed to fund the IRS “at a level that will enable it to meet taxpayer needs and maximize tax compliances, with due regard for protecting taxpayer rights and minimizing taxpayer burden.”

President Kelley has long been the leader in calling for adequate IRS funding for both its enforcement and customer service functions. “These elements are bound together, and when they are properly staffed and funded, they allow the IRS to serve taxpayers in the manner Americans need and deserve. NTEU will focus its efforts on increasing resources for the IRS.”

The Taxpayer Advocate Service, headed by Olson, is an independent organization within the IRS whose charge is to assist taxpayers in a variety of ways.

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