GAO finds IRS failures in accounting, IRS responds that Congress passed a budget late

Congressional Democrats’ decision not to pass a budget has a significance greater than the political talking point it creates for Republicans. Apparently, such a failure can also cause havoc for federal agencies like the Internal Revenue Service. When the agency was found to be in violation of “requirements in its annual appropriations act” by the Government Accountability Office earlier this week, the IRS defended itself, saying that it couldn’t anticipate how much money it would be getting from Congress because last year it passed a budget late in the year:

IRS did not comply with requirements in its annual appropriations act. Although that act required IRS to set aside at least $7.487 billion for tax law enforcement and related support activities, IRS fell short by about $74 million. IRS attributed the cause to (1) delays in hiring staff for enforcement activities caused by an almost 6-month delay in the enactment of IRS’s fiscal year 2009 appropriations, and (2) increased funding for taxpayer services.

Emphasis mine. The IRS responded:

Upon receipt of the additional taxpayer service funds in the FY 2009 enacted budget, the IRS identified the issue and informed both OMB and the House and Senate appropriations committees that the IRS would not meet the funding level contained in the appropriations language.

In other words: If Congress doesn’t pass a budget, it’s hard for agencies to estimate how much funding to dedicate to particular areas — and beyond that, they frequently don’t have the ability to do so because they rely on Congress to tell them how to spend the money. As a consequence, money isn’t spent where it should be.

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