NTEU Supports Obama Budget Request for IRS

"At a time when Congress is debating painful choices of program cuts and tax increases to address the federal budget deficit, we believe it makes sense to invest in one of the most effective deficit reduction tools: collecting revenue that is owed, but has not yet been paid," said President Colleen M. Kelley of the National Treasury Employees Union (NTEU).

The House Appropriations Subcommittee on Financial Services and General Government was conducting a hearing on the IRS fiscal 2013 budget. The administration has proposed IRS funding of $12.76 billion in the coming fiscal year, an increase of nearly $945 million from fiscal 2012.

The increase is critical, President Kelley told the subcommittee, in part to make up for reduced funding levels in fiscal 2010 and 2011. "Despite the critical role the IRS plays in helping taxpayers meet their tax obligations and generating revenue to fund the federal government," she said, "the IRS's ability to continue doing so has been severely challenged" due to funding cuts over the past two fiscal years.

It is not an idle consideration, the NTEU leader said. "The dangers associated with underfunding the IRS cannot be overstated." They include a diminished capacity to answer taxpayer telephone calls; delayed responses to small business owners or individual taxpayers looking to set up payment plans; and abnormally long wait times at Taxpayer Assistance Centers across the country, impacting the most vulnerable populations, including the elderly and those who speak English as a second language.

Kelley applauded the administration's approach of providing additional resources for both the customer service and enforcement aspects of its tax compliance efforts. "NTEU strongly believes that helping taxpayers understand their tax reporting and payment obligations is the foundation of taxpayer compliance," she told the subcommittee, in supporting a proposed $13.4 million in additional resources for taxpayer services.

At the same time, she emphasized the importance of proposed additional funding for enforcement efforts, some of which will be directed toward increased compliance by addressing offshore tax evasion, reducing the underreporting of income tax gaps and restoring revenue lost from fiscal 2012 reductions to examination audit and collection programs.

In a report to Congress earlier this year, the National Taxpayer Advocate identified inadequate funding for the IRS as the most serious problem facing taxpayers. The report noted that a lack of sufficient resources coupled with a rising workload and increasing complex tax code was negatively impacting IRS's ability to carry out its taxpayer service mission and assist efforts to reduce the federal deficit.

Kelley noted for the subcommittee that while the IRS generated $55 billion in enforcement revenue in fiscal 2011, that figure was down from $57.6 billion in fiscal 2010. "The reduction in revenue can be partly attributed to a reduction in the total number of revenue officers and revenue agents," she said. These two positions play key roles in IRS enforcement efforts, and their numbers have been reduced by almost 20 percent since 1995.

"The need for sufficient enforcement staffing is more than important than ever," the NTEU leader told the subcommittee. "Even an incremental reduction in the amount of unpaid taxes would provide critical resources for the federal government."

NTEU is the nation's largest independent union of federal workers, representing 150,000 employees in 31 agencies and departments.