Washington D.C. – The start of the 2019 tax season is fast approaching and yet another group of tax professionals is warning that massive budget cuts at the Internal Revenue Service are damaging to taxpayers, counter-productive and indefensible.
The annual IRS budget is $2.2 billion less now than it was in 2011, a drop of 16 percent, the IRS Advisory Council said in its annual report. The council includes taxpayers, tax professionals, business leaders, academics and accountants.
“The draconian cuts to the IRS budget have meant less of everything from personnel to training to taxpayer assistance to enforcement activities to compliance to systems modernization and, ultimately, to tax revenue,” it states.
The report adds yet another authoritative voice to the repeated warnings that persistent budget shortfalls could hamper the success of the 2019 tax filing season and the implementation of the Tax Cuts and Jobs Act. The filing season traditionally opens in January.
“The National Treasury Employees Union agrees with the IRS Advisory Council conclusions that starving the agency of operating funds makes it harder for the agency to assist taxpayers and collect the tax revenue the country needs to function,” said NTEU National President Tony Reardon.
The council’s calls for “consistent, adequate and appropriate” funding goes back to 2011, when Charles Rettig was chair of the advisory council.
“Seven years later, as Mr. Rettig assumes the role of Commissioner of Internal Revenue, the IRS budget and resources are even more desperate than Mr. Rettig’s IRSAC could have imagined,” the report states.
There are almost 24,000 fewer full-time employees than in 2010, and more than 17,000 of them worked in enforcement. The result is an audit rate that has fallen by almost 50 percent; fewer investigations of tax dodgers; and enforcement has been curtailed to the point that the agency over the eight years has missed out on collecting $58 billion to $84 billion in taxes owed.
The report also has some harsh findings about the impact the inadequate funding and exception-only hiring freeze have had on IRS employees: workloads are higher and the total workforce has fewer than 3 percent of employees under the age of 30.
So far in fiscal year 2019, the funding problems have continued. The IRS is operating under the continuing resolution that expires Dec. 7, which means that $77 million Congress had promised this year to help implement tax reform has not been provided.
“The opening of the new tax filing season is around the corner and frontline IRS employees are worried that they will not be fully trained on the massive changes to the new tax code,” Reardon said. “Taxpayers and business owners are going to demand quick and accurate answers to their questions, and the agency needs 2019 appropriations to help hire, train and equip them to be ready.”
NTEU represents 150,000 employees at 33 federal agencies and departments.