Taxpayers will be Harmed by Draconian Cuts to IRS Budget

Press Release December 10, 2014

Washington, D.C.—The head of the National Treasury Employees Union (NTEU) today expressed deep disappointment in Congress’ decision to slash the Internal Revenue Service’s (IRS) fiscal year 2015 budget to $10.9 billion—a reduction of roughly 3 percent from this year’s funding level.

“This budget hurts everyone in our country by further eroding the IRS’ ability to provide tax assistance to millions of Americans, curb tax fraud and collect the taxes owed that finance vital programs and services and reduce the federal deficit,” NTEU National President Colleen M. Kelley said.

The IRS funding is included in the omnibus spending bill released last night. The spending package provides funding for many government agencies for the remainder of the 2015 fiscal year.

“Millions of taxpayers try calling the IRS each year to get answers to basic tax questions so they can pay what they owe on time. This is crucial to the integrity of the tax system, which relies on voluntary compliance,” Kelley said.

With these new budget cuts, the IRS estimates that it will only be able to answer roughly half of the calls it receives. Last year, four in 10 people who called the IRS seeking tax help were unable to reach an IRS employee. Taxpayers who did get through to an IRS employee experienced longer wait times as well.

“American taxpayers deserve better than this. Congress needs to restore IRS funding,” President Kelley said.

Since fiscal year 2010, Congress has cut IRS funding by almost $1.2 billion, or 10 percent, forcing the agency to severely reduce its full-time, permanent workforce by 13,000 employees. This occurred even as the country added about seven million new taxpayers.

“There is even less assistance for a growing number of Americans who are grappling with an increasingly complicated tax code,” the union leader said.

Taxpayer assistance is not the only casualty. The IRS also has lost 5,000 enforcement personnel such as revenue agents and criminal investigators. This has caused audit numbers to drop and reduced other collection activities leaving billions of dollars in tax revenue uncollected. According to the IRS, every dollar invested in IRS enforcement programs generates $7 in return.

“These continuing cuts are crippling the IRS and costing the government billions of dollars in lost revenue. This is short-sighted, politically driven budgeting and it needs to end,” President Kelley said.

Lower budget numbers also will impact the ability of the IRS to handle the growing incidence of tax-related identity theft cases. According to IRS figures, the incidence of identity theft investigations it handled jumped 66 percent from fiscal year 2012 to fiscal year 2013.

IRS’ current staffing level is 26 percent below the number of employees it had 18 years ago. In 1995, the IRS had 114,064 workers to administer tax laws and process 205 million tax returns. By the end of 2013, staffing had fallen to 83,613 to administer a more complicated tax code and process 242 million tax returns and other forms. Next year’s employee rolls will further shrink, increasing the workload on the remaining employees.

NTEU, the nation’s largest independent federal employee union, represents 150,000 employees in 31 agencies and departments.

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