Report Underscores High Cost of Shortchanging the IRS

A new report provides yet more evidence of the high cost of IRS budget cuts on taxpayers and the U.S. Treasury.

In an annual report to Congress, the IRS Acting Taxpayer Advocate found that the IRS was delayed in sending refunds to many taxpayers and was unable to answer the majority of phone calls from those needing help during last year’s tax filing season. The agency answered only 29 percent of the 100 million telephone calls it received during fiscal 2019.

The report estimated unpaid taxes averaged about $381 billion from 2011 to 2013. For the average household in 2013, that added up to an annual surtax of more than $3,000 to subsidize taxpayers who aren’t paying all they owe. 

Due to budget reductions, the agency has  scaled back in-person assistance, closing more than 10 percent of its Taxpayer Assistance Centers, generally requiring taxpayers to schedule appointments in advance, and reducing the number of taxpayers served by nearly half from 2015 to 2018.

The report points out that answering 100 million telephone calls, conducting audits, and taking enforcement actions require adequate staffing. The IRS cannot substantially improve its performance without additional resources.

“It is economically irrational to underfund the IRS,” the report says, adding that the return on investment for the “country’s accounts receivable department: is 300:1.

While NTEU worked successfully to secure a substantial budget boost for the IRS this fiscal year, the union will continue to advocate strongly for more resources to allow the IRS to continue rebuilding its depleted workforce.