Taxpayer services and major IT modernization efforts at the Internal Revenue Service could be in jeopardy if the agency does not receive the increase in funding proposed in President Barack Obama’s fiscal year 2015 budget, according to a new report.
The IRS’ budget has plummeted by nearly $1 billion dollars since 2010, creating significant uncertainty for current and future operations and threatening two of the agency’s major IT projects, according to a June 12 report from the Government Accountability Office.
The GAO reported that the cuts since 2010 resulted in significant staffing declines — as many as 10,000 full-time employees — and uneven performance at the agency. In addition, the average wait time a caller spends attempting to reach an IRS representative had almost doubled, the report said.
To cope with the budget decreases, among other cuts, the agency has been forced to put a hold on two major IT projects.
The agency had been developing an Information Reporting and Document Matching program, which would match business tax returns with personal tax returns to potentially discover income underreporting. But the loss of funding forced IRS to halt development and the agency is now examining options to purchase a system rather than build its own.
The Return Review Program, another major IT initiative, would use “leading-edge technology” to detect and prevent fraud. The agency put a hold on the software due to the cuts, but it will look to create a plan to move the project along this summer.
In his 2015 budget, President Obama requested a 10.5 percent increase in funding for the IRS, which would bring the agency to the highest level of funding since 2010. But even if the agency receives a significant increase, the GAO report still recommended the agency create a long-term strategy to operate in an uncertain budget environment.
“There are a number of indications that funding is unlikely to soon return to the growing and high budget levels IRS experienced in fiscal years 2010 and 2011,” the report said. “Under the Budget Control Act of 2011, sequestration of discretionary appropriations could occur in any fiscal year through 2021.”
In a release, the National Treasury Employees Union, which represents 150,000 federal employees across 31 agencies and departments, said the outlook for the nation’s tax compliance system is bleak.
“Without additional and sufficient resources, the declines in service and enforcement by the Internal Revenue Service experienced by taxpayers in recent years and caused by repeated budget cuts, sequestration and reduced staffing can be expected to continue in 2015,” the release said.
The NTEU urged Congress to provide the IRS with the appropriations it needs to improve taxpayer assistance, as well as to increase the agency’s efficiency. NTEU President Colleen Kelley echoed sentiments made in the updated IRS’ Taxpayers Bill of Rights, which was released earlier in the week, and said that one of the fundamental taxpayer rights is the right to quality service.
“The IRS cannot provide quality service if there is not sufficient personnel to answer the phones and staff the walk-in centers,” Kelley said. “[The cuts are] counterproductive in so many ways.”
