The American Institute of CPAs is urging Congress to provide the Internal Revenue Service with “sufficient” funds to perform its duties.
“The IRS needs sufficient operating funds to properly administer and enforce our complex tax laws, as well as provide assistance to taxpayers and their advisers,” the AICPA wrote Sept. 4 in a letter to the chairmen and ranking minority members of the U.S. House of Representatives and Senate Appropriations Committees.
The AICPA cited the IRS’s overall budget allocation of approximately $11.8 billion in fiscal year 2012, down from approximately $12.1 billion in fiscal year 2011.
“The IRS budget is oftentimes the subject of debate, and may be even more so now given recent allegations regarding expenses incurred by the IRS and the handling of certain taxpayer matters,” the AICPA wrote. “Congressional oversight of the IRS is a critical function and one that contributes to the success of the system and elevates the American taxpayer’s perception of the IRS’s objectivity and its ability to effectively manage the tax administration process. Likewise, we believe that proper funding of the IRS’s budget is essential to the IRS’s ability to carry out its mission.”
The AICPA also outlined what it believed would result from another decrease in the IRS’s budget:
• increase wait times for incoming telephone calls from taxpayers and tax practitioners;
• create excessive delays in responding to taxpayers’ written inquiries and responses to IRS notices;
• lead to the inability of Service staff to meet and assist with the needs of taxpayers who visit walk-in taxpayer assistance centers;
• result in the failure to keep taxpayers informed of tax law changes (via customer outreach, printed and online materials, webcasts, etc.);
• exacerbate the problem of excessive delays in the issuance of administrative guidance; and
• slow down the release and update of tax forms
In urging Congress to reevaluate its budget allocation, the AICPA also mentioned the “onslaught of new issues” that burden an under-resourced IRS, including administration of the Affordable Care Act, extensive new foreign reporting requirements, and the recent increase in taxpayer identity theft cases.
Sufficient funds are also required for the IRS to provide quality, timely service, according to the AICPA, in terms of both adequately developing new employees and modernizing its outdated technology.