The Internal Revenue Service is in a position few would envy. As it prepares for a new tax filing season that begins on Jan. 20, it must do so with a budget reduced by 10 percent since fiscal year 2010 and a slashed workforce, while also shouldering new responsibilities under the Affordable Care Act.
Colleen Kelley, president of the National Treasury Employees Union, says with fewer employees to answer phones at the IRS, she understands taxpayers’ frustrations about filing questions going unanswered, but adds that the agency isn’t any happier with its marching orders from Congress and the White House. “If you were on hold for half an hour, you can imagine the kind of reception some taxpayers might be delivering to those IRS employees, and they deal with that everyday. And they understand, they say, ‘We’re really sorry it took so long, we’re doing the best we can do to help you today.’ But a lot of them are speaking in very high pitches, the taxpayers, and they’re very angry,” Kelley said on Your Turn with Mike Causey.
Congress in December approved a $10.9 billion budget for the IRS in fiscal year 2015 — $1.2 billion short of what it was in 2010 — leaving a $346 million cut that the agency must absorb during the remaining nine months of the year. In addition, the agency has 13,000 fewer employees than it did in fiscal 2010.
In an interview on In Depth with Francis Rose, IRS commissioner John Koskinen said the agency has no choice but to reduce its level of service to 50 percent for the remainer of FY 2015 — meaning one in every two callers to the IRS will not get through to a live operator to answer their tax questions, what Koskinen called “a miserable level of service.”
“This is not just money that’s about the IRS,” Kelley said. “The IRS collects 93 percent of the revenue that funds the entire federal government. So when Congress does not fund the IRS to bring in the revenue, then every other agency who is dependent on appropriated funds from Congress suffers from that because the revenue is not there for them.”
Limiting the IRS’ budget, Kelley said, limits its ability to collect revenue from taxpayers. Cutting budgets may save money in the short-term, she said, but the government will lose more money doing so in the long-term.
“The enforcement at the IRS is documented to bring in $7 for every $1 invested in them — and that’s a number that comes from the IRS, comes from Department of Treasury, has been documented by GAO. I mean, this is not just a number that someone has come up with,” Kelley said. “So it’s really a loss not just for the IRS but for the country to not invest in the IRS and give them the revenue to hire those enforcement personnel so they can keep that money coming in.”
In addition, Kelley said the allegations surrounding former IRS official Lois Lerner that the agency deliberately stalled applications for conversative groups seeking tax-exempt status have kept the IRS from moving forward.
“Those allegations were a major distraction for the agency and also for employees, and not that there shouldn’t be answers to [allegations], but there have been investigations, and there have been reports released, and every report to date has shown that no front-line employee did anything wrong, that there was no plot or agenda to treat one kind of taxpayer differently than another. They were not acting on applications timely and that was because of some management issues along the way of where they were getting guidance from and where they were waiting for guidance,” Kelley said.
Kelley said it remains to be seen whether the 114th Congress will continue to investigate the issue so doggedly.
“We’ll see with this new Congress,” she said. “There are some who were very vocal in leading the charge on trying to prove something was wrong, and that employees did something wrong. But they were not successful in doing that. But some of them are coming back and some new ones who think that there was something there.”
Once the tax season begins, Kelley said those who file their taxes early will put a big strain on an already beleaguered IRS.
“On Jan. 20, taxpayers are going to start filing their tax returns, they’re going to be calling in by the hundreds of thousands on the telephone looking for assistance, and only half of those taxpayers are likely to be able to get through because of the staffing levels at the IRS,” Kelley said. “And if they get through, they’re probably going to be on the phone for close to half an hour, on hold, waiting to speak to someone. That’s because of the staffing level impact that these funding issues have had on the IRS. And in the end, this isn’t just about the IRS, it’s about the taxpayers who are looking for that service, who are looking for that assistance and who deserve it.”
Kelley also commented on Congress’ passage of a package of retroactive tax extenders in December. She said the last-minute passage of the bill keeps taxpayers guessing.
“We run that risk every year, they always come right down to the wire,” Kelley said. “It really puts in place credits and things that taxpayers have counted on all along, but they need it in the law to say that it was effective for 2014 before people file their return. But if they wait til last minute to do it, then the IRS has to be able to give the taxpayers the right forms and the right information.”