GAO Report Links IRS Problems to Budget Cuts

The IRS could do a better job if it had more resources at its disposal. That is the essence of a new report released on April 21 by the Government Accountability Office (GAO).

The GAO conducted the report to (1) analyze IRS funding, staffing, and performance trends for fiscal years (FYs) 2009 through 2014, including an assessment of  this year's  filing season to date; (2) describe the IRS' budget request and workload for next year; and (3) describe actions by the agency to absorb budget cuts and cite opportunities that could help it better manage operations.

The GAO found that IRS appropriations are at their lowest levels since FY 2009. To compound this problem, the tax collection agency's staff has been reduced by about 8,000 full-time workers during this five-year stretch. Other numbers analyzed by the GAO show a direct link between the IRS' performance and taxpayer services. And, according to the report, things will only get worse before they get better. To wit:

  • In FY 2014, the audit coverage target for individual examinations was just 1.0 percent. This target has been lowered even further to 0.8 percent for FY 2015.
  • The percentage of callers to the IRS seeking and receiving live assistance was 73 percent from January 1 through March 15, 2014, as compared with 69 percent for the same 2½ months last year. Between FY 2009 and 2013, its telephone level of service fluctuated between 61 percent and 74 percent. Average wait times have almost doubled since FY 2009 from 8.8 minutes to 16.8 minutes as of mid-March 2014.
  • Not including other resources (e.g., user fees), the FY 2015 budget request from the IRS is $12.5 billion, an increase of 10.5 percent ($1.2 billion) in funding and 8.3 percent in staffing (6,998 fulltime equivalents) over FY 2014. According to the president's budget plan, $480 million of the requested $1.2 billion is predicated on an  adjustment of the discretionary spending limit and applies mainly to enforcement and infrastructure initiatives. But the IRS is facing increased responsibilities under Obamacare and other legislative measures.
  • The IRS has seen its budget slashed by approximately $900 million since FY 2013. As a result, it had to delay two information technology projects—the Information Reporting and Document Matching and Return Review Programs—and was forced to scale back employee training. 

Although the GAO report acknowledges that budget cuts have hurt the IRS, it isn't looking to extra funding as a panacea. It recommended several ways the IRS could improve its performance, including taking steps to eliminating duplication and developing a long-term plan for improving website services. More details about duplication are cited in a Washington Post article.

Related articles:

Bramwell's Lunch Beat: GAO Sheds Light on IRS Budget Woes
GAO Identifies Weak Links in IRS' Internal Controls


You may like these other stories...

Hertz and Icahn make peaceThere won’t be any nasty, protracted proxy battle between Hertz Global Holdings and activist investor Carl Icahn. The rental car chain agreed last Thursday to give Icahn – who has...
For bitcoin users, the taxman cometh. And you best know how to calculate taxes owed on what the IRS calls convertible virtual currency.In March 2014, the IRS issued Notice 2014-21, which declares virtual currency will be...
Majority of House of Representatives urges leadership to preserve cash method of accounting for tax purposesA bipartisan majority of the House of Representatives – 233 members – has signed a letter urging House...

Already a member? log in here.

Upcoming CPE Webinars

Sep 18
In this course, Amber Setter will shine the light on different types of leadership behavior- an integral part of everyone's career.
Sep 24
In this jam-packed presentation Excel expert David Ringstrom, CPA will give you a crash-course in creating spreadsheet-based dashboards. A dashboard condenses large amounts of data into a compact space, yet enables the end user to easily drill down into details when warranted.
Sep 30
This webcast will include discussions of important issues in SSARS No. 19 and the current status of proposed changes by the Accounting and Review Services Committee in these statements.
Oct 23
Amber Setter will show the value of leadership assessments as tools for individual and organizational leadership development initiatives.