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Washington, D.C.—Funding restrictions of the past several years have left the Internal Revenue Service struggling to meet its mission, the head of the National Treasury Employees Union (NTEU) said today in urging Congress to restore needed resources.

NTEU President Colleen M. Kelley said that cuts to the IRS budget are reducing the ability of the agency to generate critical revenue for the federal government. According to the IRS, every dollar invested in agency enforcement programs generates roughly $7 in return. Thus, a $600 million reduction to IRS’s budget for fiscal year 2013 will result in the loss of more than $4 billion in revenue this fiscal year alone.

“That lost revenue could otherwise be invested in critical government programs or used to reduce the federal deficit,” Kelley told a Senate panel.

Her comments came in a statement submitted to the Senate Financial Services Appropriations Subcommittee, which conducted a hearing today on fiscal 2014 appropriations for the Department of the Treasury.

Overall, the IRS has seen a nearly $1 billion cut in funding since fiscal year 2011 resulting in a series of damaging impacts to taxpayer service, tax enforcement, revenue collection, and efforts to combat tax-related identity theft.

Budget restrictions of recent years have forced the IRS to reduce critical frontline staffing, limiting its ability to assist taxpayers. Helping answer taxpayer questions will take a further hit with the unprecedented shutdown of all public services during five scheduled furlough days. “Furloughs of IRS employees will result in the inability of millions of taxpayers to get answers from IRS call centers and taxpayer assistance centers and will significantly delay IRS responses to taxpayer letters,” President Kelley said.

Efforts by the IRS to combat the rising incidences of tax-related identity theft also are being hurt by budget cuts. According to the National Taxpayer Advocate, the IRS had more than 1.25 million identity theft cases in its inventory as of the end of February 2013, a drastic increase from 2012, when it had fewer than 235,000 cases.

“The IRS is doing what it can to prevent and investigate identity theft crimes and help victims,” President Kelley said. “But due to the rapidly growing nature of identity theft, it will be impossible for the IRS to keep pace without additional resources.”

The NTEU leader identified the difficulty in reducing the tax gap with the limited resources the IRS is working under. “According to the IRS, the amount of taxes not timely paid is $450 billion,”

Kelley said. “While the tax gap can never be completely eliminated, even an incremental reduction in the amount of unpaid taxes would provide critical resources for the federal government.”

The congressionally mandated IRS Oversight Board has also expressed concern over the impact on taxpayer services and enforcement efforts caused by recent budget cuts, as have other organizations including the American Institute of Certified Public Accountants.

Only by restoring funding for effective enforcement and taxpayer service programs can the IRS provide America’s taxpayers with quality service while maximizing revenue collection necessary for reducing the federal deficit, Kelley concluded.

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