As if filing your taxes isn’t painful enough, the top taxpayer advocate for the Internal Revenue Service is warning that budget cuts approved by Congress in the latest spending bill are about to make this year’s filing season even more dreadful than usual.
The IRS’s Nina Olson released her annual report detailing last year at the IRS as well as what to expect in the upcoming tax filing season—and her take isn’t pretty.
WHY THIS MATTERS
There’s another reason to worry about the IRS budget cuts—the annual $400 billion (and growing) tax gap. With fewer agents to collect taxes from cheaters and those who make honest mistakes, the country loses a fortune each year. Guess who makes up the difference? Responsible taxpayers.
Related: More Budget Cuts at the IRS Could Cost Billions
In the National Taxpayer Advocate 2014 annual report to Congress, Olson predicts this will be the worst filing season in more than a decade—with the budget cuts severely hampering the IRS’s customer service.
Since Congress sliced the agency’s budget by $346 million this year, the there will be 12,000 fewer IRS employees to help assist taxpayers with their filing questions, the report said.
The IRS receives about 100 million phone calls a year from taxpayers. But according to Olson, the staffing reduction means the IRS will only be able to field about 43 percent of those calls calls. Hopefully they at least have some decent hold music.
Olson and others at the agency have been extremely critical of lawmakers who continue to slice the IRS budget, which is now about $10.9 billion--$1 billion less than it was five years ago.
Related: Budget Cuts and Mismanagement Boost IRS Tax Cheats
"We do not think it is acceptable for the government to tell millions of taxpayers who seek help each year, in essence, 'We’re sorry. You’re on your own,'" Olson said in the report.
The IRS’s budget slicing comes just as the agency is taking on more responsibility than ever under the president’s health care law. The ACA has at least 40 new provisions for the IRS to enforce. Now the agency has to stretch its budget to continue its old responsibilities while heaping on the new ones.
On Tuesday, IRS commissioner John Koskinen warned his employees that the IRS might have to shut down for two days this year as his agency may be required to furlough workers to cope with the cuts. If that happens, that could make the filing season even more unbearable for taxpayers.
"Without adequate support, many taxpayers will be frustrated, some will make potentially costly mistakes, others will incur higher compliance costs when forced to seek information and assistance from tax professionals that the IRS previously provided for free, and still others will simply give up and not file returns at all," Olson said in the report.
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