An Underfunded IRS Would Struggle with Implementing Tax Reform

Press Release December 13, 2017

Washington, D.C. – As Congress considers the largest overhaul to the tax code in 30 years, lawmakers should provide additional resources to the Internal Revenue Service, the primary agency responsible for implementing the changes, National Treasury Employees Union President Tony Reardon told Congress Wednesday.

The current House and Senate versions of the 2018 appropriation bills actually decrease overall funding for the IRS by $155 million and $124 million, respectively.

Reardon provided details of the damage caused by $900 million in IRS budget cuts since 2010 and the corresponding loss of almost 21,000 full-time, permanent employees. There are fewer tax professionals available to assist taxpayers with questions, making them wait longer for help; there are more delays in resolving cases of identity theft; and fewer people are able to get in-person help at Taxpayer Assistance Centers.

“NTEU strongly believes that limiting the amount of live assistance to taxpayers who are actively seeking assistance with their tax-related issues will be detrimental to efforts to increase compliance with our nation’s tax laws, and only serve to harm those taxpayers that rely on the assistance of qualified and experienced IRS employees to understand and meet their tax obligations,” he said.

Reardon submitted written testimony about agency funding for today’s hearing by the House Ways and Means Oversight Subcommittee.

“In order to implement tax reform legislation and assist the taxpaying public and businesses, IRS must, among other things, extensively reprogram its computers, develop new regulations and tax forms, educate taxpayers and the tax practitioner community so they can understand and comply with the new tax law, respond to what is expected to be a significant increase in taxpayer requests for direct assistance, and train IRS employees,” Reardon said.

He noted that the proposed cuts are the opposite of what happened during the 1986 tax reform effort, when Congress and the administration provided enough extra money to add more than 2,100 taxpayer assistance employees at the IRS. The National Association of Enrolled Agents and representatives for Low-Income Tax Clinics are also calling on Congress to provide additional funding for the IRS. 

The Senate tax reform proposal includes language supporting adequate funding for IRS, and NTEU urges Congress to include that provision in the final bill.

The Senate bill states that “politically motivated budget cuts are counterproductive to deficit reduction, diminish the IRS's ability to adequately serve taxpayers and protect taxpayer information, and reduce the IRS's ability to enforce the law.”

NTEU represents 150,000 employees at 32 federal agencies and departments.