Home Media Center News Releases

Washington, D.C.—Even as the House of Representatives passed additional drastic cuts to the Internal Revenue Service (IRS) budget, a report to Congress today by the National Taxpayer Advocate sharply underscores the severe impacts of drastic budget cuts for this key agency.

National Treasury Employees Union (NTEU) President Colleen M. Kelley echoed warnings issued by Taxpayer Advocate Nina Olson in her midyear report to Congress, stating that budget-driven customer service issues proved very difficult for taxpayers during the recent tax-filing season and will worsen moving forward.

These worries dovetail with a litany of concerns expressed by President Kelley about the impact of year-after-year budget cuts on both IRS employees and the taxpayers they try to serve.

“The Taxpayer Advocate’s report confirms that taxpayers experienced a significant reduction in IRS services this filing season making it more difficult and more expensive for them to meet their tax obligations,” Kelley said. “Any way you look at it, underfunding the IRS is a disaster for the country.”

The Advocate’s report reflected the situation on the ground in the recent filing season and offered a partial look at some of what could worsen in 2015:

Fewer IRS customer service representatives available to answer phones, with wait times rising;

Fewer Taxpayer Assistance Centers (TACs) open around the country, as 16 were closed while only eight new ones were opened. The projected result is a drop of 16 percent—or one million fewer taxpayers—in the number who can be helped at the TACs in next year’s filing season;

Tens of thousands of taxpayers waiting for responses to correspondence related to the earned income tax credit, a particularly important provision to vulnerable populations;

A much-greater burden on low-income, elderly and disabled taxpayers due to the end of the longstanding practice of the IRS assisting with tax return preparation; and

Cutbacks in the kinds of assistance IRS employees can provide, forcing taxpayers to hire tax return preparers or answer questions themselves incorrectly, making tax compliance more costly and difficult.

Further, Olson—citing a Government Accountability Office finding that a lack of resources might give rise to difficult service tradeoffs by the agency—warned of the dangers inherent in that course.

She said that while her office “recognizes the need for difficult choices, with a tax system as complex as ours, answering only ‘basic’ tax law questions poses an enormous risk to the integrity of the (tax) system.”

Olson’s reference was to the IRS budget-driven decision, based in large part on short-staffing, to limit the kinds of help IRS employees could provide to taxpayers—including answering only “basic” tax law questions and no longer preparing tax returns.

“Taxpayers are filing more returns, and asking the IRS fewer questions, but not because the system has suddenly become simpler,” she told Congress. “Taxpayers are likely looking for answers from return software providers and paid return preparers, many of whom are unregulated,” she told Congress. “Tax compliance will be either more costly or impaired.” The Taxpayer Advocate Service is an independent office within the IRS.

“The House must recognize that underfunding the IRS puts its mission at risk and seriously endangers the ability of the entire government to function effectively,” President Kelley said, emphasizing that the agency collects 93 percent of all government revenue.

Along with NTEU, the IRS Oversight Board and the IRS Advisory Council, the Taxpayer Advocate has been vocal in calling for sufficient funding for the IRS to meet its responsibilities.

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