(Washington, DC) In a letter sent today, the IRS Oversight Board urged Congress to fund the IRS adequately in FY2012.
The IRS had recommended an FY2012 budget for the IRS of $13.342 billion. So far, the House and Senate Appropriations Committee approved an IRS FY2012 budget of $11.516 billion and $11.663 billion, respectively. The letter calls the gap between the Board’s recommendation and the congressional budgets “disturbingly large.”
The Board asked Congress to restore the IRS FY2012 budget to the level of the President’s request at a minimum, and preferably to the level recommended by the Board in its FY2012 IRS Budget Recommendations Special Report.
“The Board recognizes the intense pressure on Congress to reduce all federal spending, but believes that IRS funding decisions should fully consider the short- and long-term consequences of these decisions.”
Specifically, the Board voiced concern over the level of service available via toll-free phone for taxpayers seeking assistance from the IRS. In FY2010, the level of service was 74 percent. It is expected that when data is finalized, the level will fall to 71 percent in FY2011. Reduced funding will result in even lower levels of service.
“The private sector experience of the Board members reinforces our belief that taxpayers who contact the IRS seeking assistance deserve service, and when taxpayers experience delays in obtaining service, the results are dysfunctional,” the letter states. “Taxpayer may make costly mistakes, put themselves in jeopardy of enforcement action by the IRS, and in the long term, lose confidence in the tax system.”
Further, the Board cautioned that reductions in the enforcement budget will result in the loss of revenue. The House Appropriations Committee would reduce the IRS enforcement budget by $740 million below the President’s request. “Earlier this year, the IRS Commissioner publicly stated that the aforementioned budget reductions will result in a loss of revenue of approximately $4 billion a year, producing a ten-year revenue loss of $40 billion,” the letter states.
“The vast majority of taxpayers are compliant with their tax obligations, and these law-abiding taxpayers collectively benefit when the IRS enforces the law to ensure that non-compliant taxpayers also pay what they owe,” The Board says in the letter.
A copy of the letter is available at www.irsoversightboard.treas.gov.