A proposed fiscal year 2015 budget released by President Obama yesterday would provide the IRS with $12 billion in base funding, up 6.3 percent over the 2014 enacted level.
The budget would also allot $165 million through an opportunity, growth, and security initiative to improve IRS customer service performance at its toll-free call centers. Last year, only 61 percent of the more than 100 million customer service phone calls made to the IRS were answered, according to National Taxpayer Advocate Nina Olson. The president hopes to increase that response rate to 80 percent.
The IRS has been stung by an 8 percent budget reduction over the past three years, Olson noted in her annual report to Congress in January. She also stated the IRS workforce has been reduced from nearly 95,000 full-time employees in fiscal year 2010 to about 87,000 in fiscal year 2013, a decrease of 8 percent, while the agency’s training budget was slashed from approximately $172 million in 2010 to about $22 million in 2013, an 87 percent reduction.
“The lack of sufficient IRS funding in recent years has caused a deterioration in the service to taxpayers that the IRS can provide, reflected in longer wait times on the phone when taxpayers call in with questions and in the time it takes to respond to taxpayer correspondence,” the White House stated in the proposed 2015 budget. “The budget begins to reverse this trend through a more than $100 million increase to improve customer service, which will secure rapid and noticeable improvements in taxpayer interactions with the IRS.”
Colleen Kelley, president of the National Treasury Employees Union (NTEU), the union that represents IRS personnel, called the president’s proposals to improve taxpayer services and reduce the deficit a “good first step.”
“With the loss of 10,000 employees and training cuts of 87 percent since 2010, it will take several years for the IRS to rebuild, but this is a good first step,” she said in a written statement yesterday. “Taxpayers are not getting the assistance they need, and revenue is being left on the table.”
The budget blueprint also calls for $480 million to support additional tax enforcement and compliance functions.
“Research shows that every additional dollar invested in IRS tax enforcement activities returns six times its value in increased revenue, and this enforcement initiative is estimated to yield a net deficit reduction of $35 billion over the next 10 years,” the White House noted.
One week ago during a hearing of the House Appropriations Subcommitee on Financial Services and General Government, IRS Commissioner John Koskinen said the agency will continue its efforts to find savings and efficiencies wherever it can.
“But these budgetary constraints continue to pose very serious challenges to our efforts to enforce the tax laws and provide excellent customer service,” he added. “Essentially, the federal government is losing billions in revenue collection to achieve budget savings of a few hundred million dollars. In general, the IRS estimates that for every $1 invested in the IRS budget, it produces $4 in revenue – a four-to-one return.”