Watchdogs for the Internal Revenue Service testified Tuesday that the tax agency would benefit from greater funding and staffing than President Trump’s budget recommends.
“Suffice it to say: If the IRS had more resources, they could do more, both for the American people as well as their overall mission of collecting revenue to the federal government,” said Russell George, the Treasury inspector general for tax, appearing before a House appropriations subcommittee.
Neither George nor the other witness at Tuesday’s hearing, taxpayer advocate Nina Olson, had seen the budget. But both agreed that more funding was necessary.
In recent years, the IRS has seen its funding cut and its staff decreased amid controversies over its management and general belt-tightening under GOP congressional control.
The agency, however, has maintained that more funding would allow its officers to close the “tax gap” of unpaid or underpaid taxes. Commissioner John Koskinen, regarded as a villain by many congressional Republicans, has claimed that each additional dollar in funding for enforcement results in $6 to $20 extra in tax revenue.
Treasury Secretary Steven Mnuchin has expressed interest in boosting IRS funding and giving the agency new employees, contrary to congressional Republicans’ desires. Trump’s budget request for fiscal 2018 sought a $239 million cut.
In recent years, IRS funding has dropped from just under $14 trillion to less than $11 billion. Its headcount has fallen by 15,000 to about 80,000.
Those reductions, George noted, have occurred at the same time the agency has taken on the major new responsibility of administering the subsidies for healthcare insurance that are part of Obamacare, tasking it “with doing much more work with much fewer resources.”
Olson said at Tuesday’s hearing that she didn’t know what the right number of employees would be. But hiring “many more” people to help taxpayers file their taxes, she said, would be “an investment that would pay back in voluntary compliance and building trust.”
Because of a lack of employees available to field calls from taxpayers, the share of phone calls the agency is able to answer has fallen to about half, Olson has reported.
House Republicans have proposed abolishing the IRS as part of their tax reform plan. The agency would be replaced with a “taxpayer service agency.”
