IRS plans for expansion
The IRS is requesting an $80 billion increase in its budget over the next ten years. The investment is predicted to return a minimum of $320 billion.
The budget increase request for workforce and IT are in line with IRS Commissioner Charles Rettig’s October request for “consistent, timely and adequate multi-year funding” in order to overcome the IRS’s “gutted workforce and anachronic IT systems.”
The decline in the budget over the past decade has made it very difficult for the IRS to adequately function.
The IRS has fewer auditors than any time since World War II. The decline has caused the federal government to have lost out on a large amount of revenue.
Revenue officers are responsible for collecting taxes. They have suffered the most significant losses and have seen a decline by 50 percent since 2010.
Revenue agents audit complex returns and have had a 35 percent decrease. The IRS estimates that $4 dollars are brought in for every $1 the agency spends on compliance efforts. Audit rates have decreased the most for highly complex audits.
Existing IRS employees cannot simply be moved to the highest valued audits. Complex business exams can be extremely complicated and require specialized training.
“Because the expansion in the IRS’s budget is phased in over a 10-year period horizon, each year the IRS’s workforce should grow by no more than a manageable 15 percent. By the end of the decade, however, the IRS’s budget should be roughly 40 percent above 2011 levels in real terms as a result of this proposal,” according to the tax compliance agenda released by the Department of Treasury.
“The IRS’s new workforce would include additional dedicated customer service representatives ready to assist taxpayers as they navigate newly expanded programs like the Child Tax Credit, the Child and Dependent Care Tax Credit, and the Earned Income Tax Credit.”
The IRS’s IT architecture and design was created in the 1960s. Few programmers understand the old Assembly code. Auditors at the Government Accountability Office have said the antiquated code is limiting an inflexible. The number of IRS programmers that understand the IMF code is diminishing as IRS employees retire.
“It’s gratifying to see investments in the IRS workforce front and center in the administration’s plan to improve compliance and customer service,” National Treasury Employees Union National President Tony Rearden said in a statement.
David Zubler is a tax accountant and Enrolled Agent representing clients before the IRS with over 25 years of tax experience. He is the author of four tax books and is the founder and president of Your Tax Care. The company provides business and tax education to the public at its website, YourTaxCare.com. David can also be contacted by email at firstname.lastname@example.org