Furloughing the money-makers

If somebody guaranteed you a $7 to $10 return for every dollar you invested, would you take the deal?

If your company sent specialists to 14,000 customers, and the specialists brought back $9,354 for every hour they spent on the job, would you send them back next year?

Probably so…

Which is why it puzzles some people — like silly old taxpayers — as to why Congress keeps cutting the staff of the government’s biggest money-maker: The Internal Revenue Service.


IRS is one of the few federal operations that makes money. If it were allowed to live off customer fees.

But IRS, like other federal operations, will be hit by sequestration. Whether and how much this will cut into revenue not collected or tax refunds delayed, is yet to be seen. But the IRS has been shrinking for years.

In January of this year, the Reuters news agency put out a great story headlined: “Honey, They Shrunk The IRS.” The piece said that cutting the IRS by 5 percent, as proposed by some in Congress, “makes as much sense as a hospital firing surgeons or a car dealer laying off salespeople when customers fill the showroom.”

Using IRS data, the story said that auditors assigned to the 14,000 largest firms and corporations found $9,354 in additional tax owed for every hour spent testing tax returns in fiscal year 2009. Since the highest paid auditors at that time earned $71 per hour, Reuters did the math and concluded — based on a work year of 2,080 hours — the government could lose $19 million each year for every senior corporate auditor position cut from the payroll or not allowed, for other reasons, to do his or her basic job.

Furloughing people like that will cost more than it will save.

Twenty years ago — with a much smaller U.S. population — IRS had about 118,00 workers. Now it has about 95,000. The chances of getting audited are much less. This is great for honest taxpayers for whom an audit can be a costly nightmare. And it is even greater for tax cheats or people considering fudging their returns.

Now, on top of regular annual cutbacks IRS, like other agencies, is in for across-the-board cuts at the peak of tax season.

Colleen Kelley, president of the National Treasury Employees Union, said NTEU will both bargain and work with the IRS over furloughs to find ways to cut costs that would head off some or all of the need to furlough people.

The American Federation of Government Employees union has pledged to bargain for members and bargaining-unit employees in agencies (like Defense) where it has a strong presence.

Despite the desperate media reporting about the perils of sequestration, we (that is you) are not there. Yet. Most workers are entitled to an official written notice 30 days before any furlough can begin. Unions can also bargain the terms of the furloughs (like can workers pick their day?) and other points. Bottom line, there is still lots of time, talk and paperwork to come. As to how much work gets done, that’s another question.


Compiled by Jack Moore

U.S. astronauts on space missions have been woken up by music since the 1960s Gemini missions. Wake-up music has included the showtune “Hello, Dolly!” Steve Miller’s “Fly Like an Eagle,” and Louis Armstrong’s “What a Wonderful World.”

(Source: NASA)

h/t: The New Republic


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