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Washington, D.C.—The leader of the union representing Internal Revenue Service (IRS) employees today applauded the administration’s proposal for a $600 million increase in IRS funding in fiscal 2010, and in particular its call to boost resources to address enforcement of the nation’s tax laws. The White House has proposed an IRS budget of $12.1 billion in fiscal 2010, up from $11.5 billion this fiscal year.

It is clear the White House believes an increase in IRS enforcement funding would result in additional tax revenue. “According to the administration, IRS enforcement efforts recoup $5 for every $1 dollar invested,” said President Colleen M. Kelley of the National Treasury Employees Union (NTEU).

In testimony submitted to the House Appropriations Subcommittee on Financial Services and General Government, the NTEU leader added: “We believe the president’s request will allow the IRS to continue providing taxpayers with top-quality service and will assist efforts to enhance taxpayer compliance and close the tax gap." The gap between taxes owed and those paid is put at some $345 billion annually.

At the same time, President Kelley repeated her long-held position that assertive tax law enforcement efforts and enhanced, multi-faceted taxpayer customer service programs go hand-in-hand.

“By improving document matching, examination and compliance activities, the IRS will be better able to prevent, detect and remedy non-compliance,” she said, “and providing taxpayers with assistance and clear and accurate information before they file their tax returns will help reduce unnecessary contacts afterwards, allowing the IRS to focus enforcement resources on taxpayers who are intentionally evading their tax obligations.”

One of the major challenges Kelley identified as facing the IRS is “the expected large-scale retirements of thousands of Service personnel over the next several years (which) will further deplete the decimated IRS workforce that is down by more than 23,0000 since 1995.”

And she took note of the growing globalization of taxpayers and businesses. “As more and more U.S. taxpayers and businesses expand into global markets, it will be important that the IRS has the technical expertise to identify and understand the proliferation of complex international activities and the emerging global nature of tax administration.”

Much of her testimony dealt with enforcement and customer service. “NTEU believes it is essential that the IRS continue to direct resources toward enforcement activities that have the greatest overall impact on compliance. One such activity is the IRS’s Automated Underreporter (AUR) program, which has evolved as an important (IRS) compliance initiative using third-party information returns to identify income and deductions that were not reported on tax returns,” Kelley said.

The NTEU leader repeatedly has pointed out that staffing levels among key enforcement personnel such as Revenue Agents and Revenue Officers has declined by as much as 30 percent since 1995, and has emphasized the critical necessity of rebuilding this depleted workforce.

The administration’s budget proposes an increase of $26.2 million and the equivalent of 300 full-time employees in the AUR document matching program for fiscal 2010. The administration said it believes this request will generate more than $386 million in additional revenue once new hires reach full potential in fiscal 2012. That would result in a return on investment of 17 to 1.

On one key matter impacting customer service, the NTEU president expressed a cautionary note should the administration’s budget assumption of more than $118 million in so-called efficiency savings not materialize in the coming fiscal year.

“If, as sometimes has been the case in previous years, the IRS fails to realize all expected savings, then the funds available for critical (IRS) personnel, such as those working at the 401 Taxpayer Assistance Centers located nationwide, would be further reduced.”

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