IRS Budget Cuts: Do they cost more than they’re worth?

Glen frost

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Certified Public Accountant **
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Master of Laws in Taxation
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The Internal Revenue Service is hitting a bit of a low point. But, if you’re the average American, you may be finding it difficult to summons the ability to feel sympathy for the agency. According to the Pew Research Center, the IRS ranked last out of 13 government agencies in a study gauging public opinion of the federal government and its different departments. In fact, the IRS was the only agency that did not receive a majority favorable view—51% of participants responded with an unfavorable view of the agency, and only 44% with a favorable one.

 

Understandably, the IRS doesn’t have great name association.If one is thinking of the IRS, one is probably thinking of April 15, and the time devoted to doing taxes (Pew additionally reports that 56% of Americans either dislike or hate doing their taxes). The IRS has also become a politically polarizing topic, and it is no secret that opinions of the agency widely differ based on one’s political affiliation.

 

Regardless, the IRS probably does not consider it headlining news that revenue officers aren’t the most popular federal employees around. And getting caught in the crossfire of Congressional battles shouldn’t be new territory for an agency that has been around since 1953. The low point comes from yet another source: working a typically thankless job, without the necessary support and resources. With increasing funding cuts—over $1 billion carved out in the past five years— a deteriorating state of the IRS has developed with very real and palpable consequences.

 

On the surface, these consequences may not seem so tragic. For example, the IRS projects that about $2 billion in owed taxes will not be collected in 2015. This sounds like a nice break from taxpayer reality: less audits, less criminal investigations, less money leaving the taxpayer’s pocket and landing in the government’s coffers. And, while all of those points are true, the dark sides to these consistent budget cuts are just as evident.

 

For all of the feelings of antipathy that the IRS conjures up, it is, at the end of the day, a government agency trying to provide a service. With a nationwide network of offices, staff, and phone lines, the IRS practices an “open door” policy with taxpayers; as the agency’s mission statement explains, the IRS exists to “Provide America’s taxpayers top quality service by helping them understand and meet their tax responsibilities and enforce the law with integrity and fairness to all.” If you’re in need of assistance, or facing a tax dilemma, the IRS is charged with the responsibility helping you to understand and abide by tax law.

 

But, with less money obviously comes less manpower and, by extension, less customer service. This translates to longer wait times for assistance. As National Taxpayer Advocate Nina Olson advised legislators in an annual report to Congress, of the 100 million people attempting to get on the phone with the IRS in 2015, half will not be successful. Those who do will have an estimated half hour wait time and be confined to asking simple questions that the IRS has authorized support staff to answer.

 

The inability to enforce tax laws may mean a projected $2 billion remains uncollected this year.  The ripple effects of a diminished revenue source for government-funded projects and services are unknown, yet undeniable. What is clear, however, is that funding cuts to the IRS will cost more than they’re worth.

 

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