IRS Budget Cuts Cause Strain on Workload and Service
January 16th, 2012 by Stephanie Erickson
In the midst of tax season, the IRS is struggling to meet customer service and workload demands due to both a decreased budget and workforce. Although President Obama requested an increase in the IRS budget in 2011, to $12.1 billion, it has actually been reduced to $11.8 billion for the year 2012. Along with this 2.4% budget cut, the IRS has been forced to offer buyouts to 5,400 of its employees. These budget cuts mostly stem from the opposition of Republicans to Obama’s health care program, (assigned for the IRS to administer). IRS officials have acknowledged that the effect of these cuts have led to a decrease in their quality of service, what we warned about in an earlier post, but claim they are “under pressure to do more with less”. In her annual report to Congress, Nina Olson, Taxpayer Advocate, states, “It is up to Congress to ensure that the IRS continues to be effective, either by reducing the IRS’ workload or by providing adequate funding to enable it to accomplish its assigned mission.” With a 17% decrease in answered phone calls from 2004 to 2011, the IRS is obviously struggling to provide taxpayers with the expected level of customer service.
Although budget cuts surely take their toll, Olson claims that the ever-changing tax code complexity is largely to blame for the IRS’ challenges. In 2010 alone, there were 579 changes to the tax code. With these complex alterations, the IRS must properly train tax auditors and effectively inform the taxpayer population, thus adding to the burdening workload.
Despite the cuts, several groups, such as the National Treasury Employees Union, still advocate for more IRS funding seeing it as an investment rather than a cost. At a Washington conference in November, Commissioner Shulman said, “We’re pretty unique since we actually raise the funds needed to run the government.” He’s referring to the fact that the IRS actually collects 93 percent of total federal revenue. He added, “If you’re going to have a conversation about the deficit, you shouldn’t cut our budget.” For that, it may be too late, but the taxpayer population is still hopeful for better service, and tax officials, for a comprehensive tax reform.
Tags: IRS, Obama, Shulman, TIN
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