Washington D.C. – The Biden administration’s detailed, long-range plan to crack down on tax evasion, apply the tax code more fully and fairly, and improve customer service is a strong justification for new investments in the IRS and its workforce, according to the National Treasury Employees Union.
The Treasury Department on Thursday released an exhaustive report on how an extra $80 billion in IRS funding over 10 years would translate into an additional $700 billion in tax revenue for the federal government, mostly from sources that haven’t been paying their fair share. The tax gap could total $1 trillion this year, IRS Commissioner Charles Rettig recently stated, and exceed $7 trillion over the next decade.
“It’s gratifying to see investments in the IRS workforce front and center in the administration’s plan to improve compliance and customer service,” NTEU National President Tony Reardon said. “We wholeheartedly concur that a fully-staffed, more robust IRS is the ticket to a fairer tax system for all.”
For more than a decade, NTEU and a host of taxpayer advocacy groups have raised the alarm about how persistent IRS budget cuts have weakened enforcement and damaged taxpayer confidence that the system is working fairly.
“The IRS, like all federal agencies, is best suited to provide the services Americans deserve when it has the resources it needs to do so,” the Treasury report states. “At present, IRS funding deficiencies have directly resulted in an inability for the IRS to meet its mission of administering a fair and effective tax system.”
According to Treasury, the enhanced IRS budget would allow the agency to grow its workforce by 15 percent a year, especially in the areas of enforcement and customer service. For example, today there are half as many revenue officers and 35 percent fewer revenue agents than 10 years ago, which has left billions of dollars uncollected. The audit rate for millionaires is down roughly 75 percent in the last decade, while audits of corporations with more than $20 billion in assets are down almost 50 percent.
Overall funding for the IRS has decreased roughly 20 percent over the last decade and there are 20,000 fewer permanent IRS employees, especially those on the frontlines who enforce the tax code and protect the integrity of the system. Rettig testified this week that IRS would need to replace more than 50,000 employees over the next six years due to regular attrition.
“Treasury’s plan is a full 180-degree turn away from 10 years of budget cuts that slashed the IRS workforce and starved the agency of the resources it needs to function as intended,” Reardon said. “NTEU will be urging Congress to adopt Treasury’s blueprint for rebuilding this important agency and giving the civil servants who work there the tools they need to do the job.”
The Treasury report also calls for modernizing IRS computer systems to increase efficiency, guard against cyberattacks and improve communications with taxpayers who need assistance.
NTEU represents employees in 34 federal agencies and offices, including frontline IRS employees around the country.