Washington D.C. – American taxpayers would be better served by an IRS that is properly staffed and resourced, according to the new National Taxpayer Advocate report released Wednesday.
In yet another expert analysis, the Taxpayer Advocate reports that the 10-year gutting of the IRS budget and workforce continues to hamstring the agency’s ability to provide exceptional customer service, collect all of the tax revenue that is rightfully owed under the law and give Americans the confidence that our tax code is being enforced fairly. The IRS Advisory Council in November noted that inadequate funding of the IRS poses a fundamental risk to tax administration. Just this week, the IRS told Congress it needs a substantial infusion of money to implement the Taxpayer First Act.
“Let’s be clear: The IRS is the accounts receivable department of the federal government. In FY 2020, it collected about $3.5 trillion on a budget of about $11.51 billion, producing a remarkable return on investment of more than 300:1.25 For this reason, it is economically irrational to underfund the IRS,” wrote Taxpayer Advocate Erin M. Collins.
The National Treasury Employees Union, which represents tens of thousands of frontline IRS employees around the country, has been sounding the same alarm and urging Congress to restore the agency’s depleted operating budget and invest more in staffing, training and technology.
When adjusted for inflation, the IRS budget has shrunk by about 20 percent since 2010 and the agency lost more than 33,000 full-time employees.
“The budget cuts and staffing losses are well documented, as is the damage being done to our voluntary tax system. This ship can be turned around but we can’t waste any more time,” said NTEU National President Tony Reardon. “NTEU will continue to lead the fight on Capitol Hill to provide the IRS with the resources it needs to carry out its missions of serving customers, processing returns and refunds and enforcing the tax code.”
NTEU welcomed the IRS’ blueprint for implementing the Taxpayer First Act, which focuses on modernizing technology and giving employees the training they need to respond to taxpayer inquiries more quickly and efficiently, either by phone, electronically or in person. The IRS estimates that fully implementing the Taxpayer First Act will cost $4 billion between Fiscal Year 2021-25.
Among the damage cited in the Taxpayer Advocate report is that IRS was only able to answer 24 percent of taxpayer calls in Fiscal Year 2020 with an average hold time of 18 minutes and the number of taxpayers receiving in-person service at Taxpayer Assistance Centers has been declining for the past three years.
“Taxpayers cannot receive the services they need with a depleted staff,” Reardon said. “The losses extend to Revenue Agents and Revenue Officers which, in turn, weakens the enforcement side as well.”
According to the Taxpayer Advocate: “Without a substantial overhaul of its IT systems, some of which were originally developed in the 1960s, and transformation of how the IRS interacts with taxpayers, the IRS cannot provide first-rate taxpayer service or efficiently carry out its enforcement and collection efforts.”
However, despite the pandemic and a massive new obligation to distribute Economic Impact Payments, the report commends the work of IRS employees. “The IRS deserves much credit for its overall performance in 2020,” it states.
NTEU represents employees in 33 federal agencies and offices.