In the lead up to Tax Day April 15, IRS Commissioner John Koskinen repeatedly berated congressional Republicans for slashing his agency’s budget in recent years and forcing cutbacks in customer service to “abysmal” levels. And indeed there is some truth to his lament.
The IRS’s fiscal 2015 budget of $10.9 billion, while an increase over the previous year, was still $1.2 billion less than it was five years ago. While the number of taxpayers increased during that time, so did the increase in electronic filing. At the same time, the IRS’s permanent full-time workforce shrank by more than 3,000 employees. The result, Koskinen says, has been a sharp decline in the quality of customer service at the height of the tax season and ill-considered reductions in the agency’s enforcement activities that is costing the Treasury dearly.
“Essentially, the government is forgoing billions to achieve budget savings of a few hundred million dollars, since we estimate that every $1 invested in the IRS budget produces $4 in revenue,” Koskinen said in a speech.
Republicans acknowledge that they slashed the agency’s budget, in part in retaliation for wasting millions of dollars on extravagant conferences for its employees and revelations beginning in May 2013 that Internal Revenue Service officials were improperly targeting conservative political organizations applying for tax exempt status. But this week, they struck back at Koskinen with a report charging that the IRS deliberately cut $134 million in funding for customer service to pay for other activities
“Spending decisions entirely under the IRS’s control led to 16 million fewer taxpayers receiving IRS assistance this filing season” at regional tax help and call-in center, according to a new House Ways and Means Committee majority staff report.
Moreover, the study found, other spending choices – including prioritizing employee bonuses and union activity at the cost of taxpayer funds, consumed resources that might otherwise have been used to assist an additional 10 million taxpayers seeking assistance.
The IRS collects nearly $500 million in user fees annually that can be spent without congressional approval, according to the report, and those fees typically are dedicated to taxpayer assistance. But this year, the IRS decided to make sharp cuts in taxpayer assistance and spent the user fee receipts on other priorities.
The report highlights what it deemed the IRS’s “questionable decisions.” For instance, officials awarded $60 million in bonuses to employees. That money could have helped fund 7.2 million calls. If IRS funding had been used more judiciously, the report added, their resources could have funded over 25 million calls from taxpayers seeking assistance.
“Americans should expect excellence from their government, and doing ‘less with less’ falls far short of that responsibility,” the report sniped.
Ways and Means Committee Chair Paul Ryan (R-WI) immediately weighed in: “At all times, but especially during tax season, the IRS should put the taxpayer first,” he said in a statement. “But instead, the agency cut funding for the very customer service that taxpayers rely on.”
Stay tuned for the next round of the House Republicans’ ongoing blood feud with the IRS.
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