The Internal Revenue Service Oversight Board is urging Congress to restore recent budget cuts at the agency to improve enforcement and taxpayer service.
In a new report, the board called for a fiscal year 2013 IRS budget of $13.034 billion, an increase of $1.218 billion over the enacted budget in fiscal 2012 and an increase of $273.2 million over President Obama’s FY2013 budget request. The board recommends an increase over the FY2012 enacted budget to restore funding cuts made to IRS enforcement programs in the previous year’s budget; fund taxpayer services so that an 80 percent level of service (LOS) on IRS toll-free telephone lines can be achieved; fund programs and initiatives that represent investments in future performance gains; and fund programs related to the implementation of the tax-related provisions of the Affordable Care Act.
The IRS Oversight Board is a nine-member independent body charged with overseeing the IRS in its administration of the tax laws.
The report states there has been a relatively slow, steady growth in IRS funding over the past decade, accompanied by improved performance by the tax agency on almost every measure.
“However, during the last two years, but especially in FY2012, this pattern of steady growth has been broken,” said the report. “The IRS Commissioner, the IRS Oversight Board, and the National Taxpayer Advocate have all warned Congress and the public about the dysfunctional consequences of such budget reductions, particularly in the form of reduced taxpayer service and lower tax revenue.”
The Oversight Board’s top two funding priorities are the restoration of audit and collection coverage lost in the FY2012 budget reductions, which the IRS estimates will result in an increase in enforcement revenue of $1.15 billion in direct revenue, and additional funding to increase the level of service on the IRS’s toll-free telephone lines from the 63 percent reflected in the President’s budget to 80 percent. Tax Code complexity requires better service, so that taxpayers who want to do the right thing will have their questions answered and be more likely to file correct returns.
In addition, the board said it recognizes the importance of Business Systems Modernization funding, noting that in fiscal 2012, despite significant cuts in the IRS’s overall budget, Congress increased BSM funding to levels consistent with those recommended by the Board. As a result, critical milestones have been met in the BSM program, the report states.
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