By Deanna White
The leader of the union representing the Internal Revenue Service (IRS) workforce has long and passionately argued that the most serious problem facing American taxpayers is insufficient funding at the IRS, which undercuts the agency's ability to fully perform its duties.
Now, National Treasury Employees Union (NTEU) President, Colleen M. Kelley, has a powerful ally to echo her message.
On January 11, 2012, Kelley issued a statement saying she strongly supports the conclusion in the annual report of the independent National Taxpayer Advocate, which states inadequate funding of the IRS means the agency cannot fully perform its vital mission for the nation.
"The NTEU has argued consistently that funding the IRS is not a cost, it is an investment that pays significant dividends for our country", Kelley said. "This report reconfirms that important principle."
In the January 11, 2012, report to Congress, National Taxpayer Advocate, Nina Olson, emphasized the folly of underfunding the IRS by pointing out that in fiscal 2011",for every dollar that Congress appropriated for the IRS, the IRS collected about $200 in return."
"That return on investment sharply underscores the reality that IRS employees are best-positioned and best-trained to do the revenue collection work of America", Kelley said. Overall, the IRS collects some 93 percent of total federal revenue, funding most government agencies.
The Taxpayer Advocate Service, headed by Olson, is an independent organization within the IRS whose charge is to assist taxpayers in a variety of ways.
In her report to Congress, Olson said the overriding challenge facing the IRS is the fact that its workload has grown significantly in recent years while agency funding is being cut.
A significant impact on the IRS workload is the surge in tax-related identity theft, in which stolen social security numbers (SSNs) are used by thieves to file returns that claim refunds. Those tax returns are generally filed very early in the tax season, according to the Taxpayer Advocate Service, so by the time a valid return is filed by a taxpayer with a legitimate claim to an SSN, the IRS blocks the return because the SSN has already been used in that tax year.
Olson said the IRS has identified more than 404,000 taxpayers who have been affected by identity theft since 2008. In fiscal year 2011, the IRS unit dealing with that issue received more than 226,000 cases, a 20 percent increase over the previous year.
Despite a marked increase in taxpayers victimized by tax-related identity theft, Olson notes that the IRS does not have sufficient personnel in place to help victims. "The process of assisting identity theft victims cannot generally be automated. IRS personnel must work directly with victims to understand what has happened, verify that they are the correct taxpayers, and take the actions required to resolve their problems", Olson writes in the annual report.
"If you are one of those many thousands of individuals affected by identity theft, you surely would want a trained IRS employee to help make this life-changing situation right", Kelley said. She added that IRS employees who work with identity theft victims are dedicated federal workers who often do not have the resources they need to adequately help people caught in that unfortunate situation.
Olson called on Congress to develop new budget procedures designed to fund the IRS "at a level that will enable it to meet taxpayer needs and maximize tax compliances, with due regard for protecting taxpayer rights and minimizing taxpayer burden."
Aside from undercutting the mission of helping IRS employees rectify tax-related identity theft, Kelley argues budget cuts at the IRS will create a "drastic degradation" in everyday tax services to CPAs and their clients – particularly during the busy tax season.
"With the $305 million reduction from fiscal year 2011 in IRS funding, the nation will see a decrease in the ability to crack down on tax cheats and the loss of billions of revenue annually", Kelley said in a December 28, 2011, statement after President Obama signed the 2012 omnibus bill into law. "However, for CPAs and their clients, the greatest impact will be seen on the ability to get the help they need in a timely and efficient manner as they attempt to navigate the increasingly complex tax code."
Echoing the sentiments of the IRS Commissioner, Doug Schulman, Kelley said that "proposed cuts by Congress during the omnibus negotiations would have caused delays of up to five months in responding to taxpayer letters, including from taxpayers who have received an IRS notice about taxes due and are seeking to resolve issues with their accounts, and result in up to 50 percent of taxpayers seeking telephone assistance from the IRS being unable to reach the agency."
She added",While the IRS budget in the omnibus was not as severe as what was originally proposed, it will nonetheless have serious consequences for CPAs and others relying on information and advice from the IRS as they address various tax code complexities during the upcoming filing season."
President Kelley has long been the leader in calling for adequate IRS funding for both its enforcement and customer service functions. "These elements are bound together, and when they are properly staffed and funded, they allow the IRS to serve taxpayers in the manner Americans need and deserve", she said. "NTEU will focus its efforts on increasing resources for the IRS."
The NTEU is the nation's largest independent union of federal employees, representing 150,000 employees in thirty-one agencies and departments.
Visit NTEU for more information.