Washington D.C. – Chronic underfunding of the Internal Revenue Service will continue to hamper taxpayer services and the proper enforcement of the tax code unless Congress reverses course and increases the agency’s budget and staffing.
National Treasury Employees Union President Tony Reardon on Wednesday urged Congress to help the IRS recover from $845 million in budget cuts and the loss of 23,000 employees since 2010.
“NTEU strongly believes that only by providing the IRS with additional resources will the IRS be able to meet the rising workload, stabilize and strengthen tax compliance and customer service programs, and allow the Service to address the federal deficit in a serious and meaningful way,” Reardon wrote in testimony provided to the House and Senate.
NTEU believes the administration’s proposal to give the IRS $11.4 billion in base funding in 2020 is inadequate, especially because it would result in the further loss of crucial, frontline full-time employees.
The agency has cut the number of staff supporting taxpayer service activities by more than 8 percent, including Customer Service Representatives, which fell from 10,209 in 2010 to 9,209 in 2017. The level of telephone service declined from 74 percent calls answered in 2010 to 38 percent in 2015. Wait times also increased.
In response to the plummeting number of calls answered, Congress provided targeted funding for two years that helped increase the level of telephone service to 80 percent in the 2018 filing season.
Despite that success, the administration’s proposed 2020 budget would reduce funding for taxpayer services by almost $90 million below the current level, even as it acknowledges that doing so would reduce the phone level of service to 68 percent in 2020.
When it comes to enforcement, budget cuts have made it harder to maximize taxpayer compliance, prevent tax evasion and reduce the deficit by collecting what is properly owed. The total number of Revenue Officers has declined by nearly 40 percent from 2011 to 2017. According to a recent Government Accountability Office report, the number of individual audits has declined by 40 percent and audit rates of large corporations has declined from 17.7 percent in 2011 to 7.9 percent in 2017.
Unfortunately, the administration’s proposed 2020 budget would reduce funding for enforcement by almost $154 million from the current level.
“Without sufficient staffing to effectively enforce the law, ensure compliance with tax responsibilities and combat fraud, our voluntary tax compliance system is at risk,” Reardon wrote.
NTEU supports the administration’s separate request for a program integrity cap adjustment to provide an additional $362 million for enforcement activities. Because enforcement is a revenue generating program, the cap adjustment would result in an additional $47 billion in tax revenue over ten years.
Testimony was submitted to the House Appropriations Subcommittee on Financial Services and General Government and the Senate Committee on Finance, both of which conducted hearings this week on the IRS budget.
“With the complexity of tax administration and future workloads only expected to rise, the IRS will be under a great deal of pressure to improve customer service standards while simultaneously enforcing the nation’s tax laws,” Reardon wrote.
NTEU represents 150,000 employees at 33 federal agencies and departments, including about 70,000 IRS employees around the country.