IRS's Rossotti Says Agency is Still Short on Resources

In what may be one of his last public appearances before his term ends on November 6, IRS Commissioner Charles O. Rossotti spoke to a conference sponsored by the American Institute of Certified Public Accountants and emphasized the growing gap between the demands placed on the IRS and the resources available to meet those demands.

"These divergent trends simply cannot continue indefinitely. It's not going to be possible for the tax system to be stable if those trends continue, so something has to turn around," he said. He explained that a growing population and an increased emphasis on customer service have strained the system that once focused on revenue collection. While IRS services have expanded beyond revenue collection, the number of IRS employees has decreased by nearly 10% in the past 10 years. The agency hired about 1,500 professionals a little over a year ago, but from 1994 to 2000, the IRS didn't hire any new revenue agents or tax professionals. "It was essentially a hiring freeze," said Mr. Rossotti.

When Mr. Rossotti assumed his position as commissioner five years ago he indicated he thought a required overhaul of the IRS would take 10 years. He still believes that is the case. He believes the ongoing improvement in technology and the shift in tax enforcement resources to higher-income taxpayers will go a long way to improve the performance of the agency.

Mr. Rossotti also described what he called "the false metaphor of the swinging pendulum," which he said referred to the idea that the IRS is perceived to be overly focused on either customer service or collection at any one time. He expressed his belief that the IRS is capable of doing both jobs well and simultaneously.

You may like these other stories...

By Cathy Stopyra and Todd SimmensUnderpayment interest, refund interest, and penalties charged to businesses are just a few of the considerations the IRS calculates when determining taxation for a given company. Though...
FASB mulling a revamped income statementDavid M. Katz of CFO wrote on Tuesday that the Financial Accounting Standards Board (FASB) is in the early stages of researching whether to launch a project aimed at improving and...
Renaissance avoided more than $6 billion tax, report saysThe Senate Permanent Subcommittee on Investigations said on Monday that a Renaissance Technologies LLC hedge fund’s investors probably avoided more than $6...

Upcoming CPE Webinars

Jul 31
In this session Excel expert David Ringstrom helps beginners get up to speed in Microsoft Excel. However, even experienced Excel users will learn some new tricks, particularly when David discusses under-utilized aspects of Excel.
Aug 5
This webcast will focus on accounting and disclosure policies for various types of consolidations and business combinations.