NTEU Lays Out Reasons to Increase IRS Funding

Press Release March 8, 2016

Washington, D.C.—Without additional funding, the Internal Revenue Service (IRS) will continue to struggle to crack down on identity theft, collect unpaid tax debts and do a good job of assisting taxpayers who need help in understanding and paying what they owe, the National Treasury Employees Union (NTEU) told Congress today.

In a statement submitted to the Senate Appropriations Subcommittee on Financial Services and General Government, which conducted a hearing on IRS funding for fiscal year (FY) 2017, NTEU National President Tony Reardon endorsed the White House’s call to give the IRS $12.28 billion in the upcoming fiscal year—an increase of about $1 billion over the current level.

With a budget of that size, IRS would be able to ramp up its customer service operations and begin rebuilding its workforce, which is down more than 15,000 full-time employees since FY 2010 as the agency was hit with $1.2 billion in cuts over a five-year period, Reardon wrote.

“Without sufficient staffing to effectively enforce the law to ensure compliance with tax responsibilities and combat fraud, our voluntary tax compliance system is at risk,” the NTEU leader warned. “And as the IRS Commissioner has repeatedly noted, a simple 1.0 percent decline in the compliance rate translates into $30 billion in lost revenue for the government.”

If the IRS doesn’t receive an appropriate level of funding, taxpayers will suffer because they will face longer wait times when they call for help and longer lines at Taxpayer Assistance Centers (TACs). Not to mention bigger correspondence backlogs, which would prevent the timely processing of a range of mail, “including letters from victims of identity theft and taxpayers seeking to resolve issues with taxes due or looking to set up payment plans,” he wrote.

Revenue collection also has taken a hit. According to the IRS, every dollar invested in IRS enforcement programs generates about $6 in increased revenues. Yet, because of budget cuts, the agency collected less revenue through enforcement efforts last year—$54.2 billion—than in FY 2007, when it brought in $59.2 billion, Reardon said.

“Sufficient enforcement staffing is also critical if the IRS is to make further progress on closing the tax gap, which is the amount of tax owed by taxpayers that is not paid on time.

According to the IRS, the amount of tax not timely paid is $450 billion, translating to a noncompliance rate of almost 17 percent,” Reardon wrote.

NTEU represents 150,000 front-line employees at the IRS and 30 other agencies and departments.

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