The House Appropriations Committee adopted a fiscal year 2016 budget proposal that would provide the Internal Revenue Service with a budget of $10.1 billion—$838 million less than the current level and $2.8 billion below the Obama administration’s FY16 proposal.
Under the plan, the IRS’s operations support and Business Systems Modernization programs would be slashed by $338 million and $40 million, respectively, and enforcement programs would get $538 million less than now. The budget cuts would likely weaken IRS efforts to crack down on the growing problem of identity theft and prevent the agency from collecting an estimated $12 billion in tax revenue next year, according to a letter sent to the committee by the federal Office of Management and Budget.
The House bill proposes shifting $75 million from other IRS programs to improve IRS telephone customer service and fight ID theft among other things,
The leader of the National Treasury Employees Union said she is deeply disappointed with the devastating cuts to the IRS budget.
“This is a draconian budget bill that will make it extraordinarily difficult for the IRS to provide taxpayer assistance and meet its overriding mission of enforcing the tax code,” said NTEU President Colleen M. Kelley in a statement. “NTEU will urge Congress to reject this spending plan.”
The NTEU pointed out he House proposal’s funding level, in real terms, is smaller than IRS’ budget in FY 1991, when the tax code was far less complicated and the country had 38 million fewer individual taxpayers.
“The IRS is already struggling to execute its mission because Congress has cut its budget by $1.2 billion in the past five years. Enough is enough. The IRS cannot sustain more cuts,” said Kelley. “This bill would further erode the IRS’ ability to combat identity fraud, collect more tax revenue and improve taxpayer services.”
In a letter the NTEU sent to the appropriators ahead of today’s vote, Kelley warned that the House proposal would further degrade the IRS’ “already impaired ability to provide taxpayers with the assistance they need and fairly enforce the tax laws enacted by Congress.”
The NTEU pointed out that the 2015 filing season was among the worst in the agency’s history in terms of taxpayer assistance. For example, due to staffing shortages, the IRS was able to answer fewer than 40 percent of taxpayer calls. Skeletal staffing at walk-in centers across the country led to record waits and long lines for taxpayers.
The Obama administration requested a $101 million increase for identity theft-related tax fraud alone and a $252 million increase for taxpayer services in FY16. The IRS has been forced to cut its full- and part-time workforce by more than 18,000 employees since 2011.
Kelley noted in her letter that the National Taxpayer Advocate, the IRS Oversight Board, the Government Accountability Office, the Treasury Inspector General for Tax Administration and others have warned of the negative consequences of chronic IRS budget cuts (see IRS Budget Cuts Translate into Fewer Dollars Collected).
“Congress needs to provide the IRS with the resources necessary to carry out the responsibilities Congress has imposed on it,” she said.
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