By Jason Bramwell, Staff Writer
The head of the union representing IRS employees said on January 14 that the $1.1 trillion omnibus spending bill House and Senate negotiators unveiled Monday night for the balance of fiscal year 2014 does not do enough to help the underfunded IRS.
“Continued underfunding of the IRS means refunds will be delayed, taxpayers will sit on hold, and tax help will be available to fewer and fewer Americans,” Colleen Kelley, president of the National Treasury Employees Union (NTEU), said in a written statement on Tuesday.
The 1,582-page funding bill would ease the automatic spending cuts of 2013, known as the sequester, and provide fresh cash for new priorities. It would fully restore cuts to the Head Start early-childhood education program, partially restore cuts to medical research and job-training programs, and finance new programs to combat sexual assault in the military, the Washington Postreported.
But the spending bill limits funding to the IRS, which has seen its budget cut by 8 percent, or by nearly $1 billion, since fiscal year 2010, despite a steady increase in the agency’s workload, Kelley stated.
According to a summary of appropriations for financial services from the House Appropriations Committee, the IRS would receive $11.3 billion as part of the fiscal year 2014 bill – a slight increase over the roughly $11.2 billion the agency received from the fiscal year 2013 appropriations bill – but $526 million lower than the agency’s pre-sequester level for 2013.
Approximately $92 million of that allotment would be set aside to improve taxpayer services and address refund fraud, identity theft, and overseas compliance. The allotment does not contain funding for the Affordable Care Act.
“While the appropriations bill is a nominal improvement, it is woefully inadequate to allow agencies to deliver the critical services taxpayers expect and deserve,” Kelley said.
The bill also prohibits the IRS from using funds to "target groups for regulatory scrutiny based on their ideological beliefs or to target citizens for exercising their First Amendment rights", according to the summary. Last May, the IRS admitted it had improperly scrutinized the federal tax-exempt status of certain conservative groups, including the Tea Party, during the 2012 election.
The legislation also requires extensive reporting on IRS spending, training, and bonuses, and prohibits funding for “inappropriate videos.” Last June, a report from the Treasury Inspector General for Tax Administration (TIGTA) claimed the IRS spent about $50 million in holding at least 220 conferences for staffers between 2010 and 2012.
The agency was also criticized for producing training videos at taxpayers' expense. Three videos – including parodies of Star Trek and Gilligan's Island and another one of IRS workers line dancing – were handed over to Congress on May 31, 2013. The videos collectively cost more than $60,000 to produce.
However, the funding measure would provide a pay increase of 1 percent for federal employees under the wage grade system, a provision the NTEU strongly supports.
“Wage grade employees are among those most in need of this pay increase,” Kelley said.
Personnel and Training Cuts Hamper IRS Customer Service
In her annual report to Congress, which was released on January 9, National Taxpayer Advocate Nina Olson, who runs an independent office within the IRS, noted as the IRS budget has eroded by 8 percent in the past three years, inflation has risen by about 6 percent.
“Because of these budget reductions, the IRS has been significantly hampered in its ability to provide ‘top-quality service’ and maintain effective enforcement programs that minimize noncompliance,” she wrote.
She also noted 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.
That reduced budget has significantly affected IRS customer service. For example, only 61 percent of the more than 100 million customer service phone calls made to the IRS last year were answered, according to the report. Telephone wait times have increased from 2.6 minutes a decade ago to 17.6 minutes in 2013.
Also, in fiscal year 2014, the IRS will answer only “basic” tax law question during tax-filing season (January through April) at its nearly 400 walk-in sites. The agency will not answer any tax law questions beyond April, including questions from taxpayers who obtain filing extensions and prepare their returns later in the year. This new policy also applies to taxpayers who seek assistance with tax law questions by phone.
“In the face of severe budget cuts and reduced personnel in recent years, what is needed is a true investment in the IRS, not more of the same,” Kelley said. “The White House had it right when it proposed a fiscal 2014 budget of $12.8 billion for the IRS. This agency collects 93 percent of all government revenue. It is the linchpin for the entire government, and it must have sufficient resources and staffing to do this critical job effectively.”
About Jason Bramwell
Jason Bramwell is a staff writer and editor for AccountingWEB. He has nearly 20 years of experience in print and online media as a journalist and editor.