IRS
IRS Budget Cuts Affect Case Closure Rates and Dollars Collected
Reduced budgets and collection resources at the Internal Revenue Service (IRS) have resulted in declines in taxpayer service, case closures, and dollars collected, according to a report released today by the Treasury Inspector General for Tax ...
Jun. 17, 2015
Reduced budgets and collection resources at the Internal Revenue Service (IRS) have resulted in declines in taxpayer service, case closures, and dollars collected, according to a report released today by the Treasury Inspector General for Tax Administration (TIGTA).
TIGTA initiated its audit to determine the impact that IRS budget reductions have had on collection programs and employees.
Between Fiscal Years 2010 and 2015, the IRS’s budget has been reduced by more than $1.2 billion. Since Fiscal Year 2010, decreases in the IRS’s budget have resulted in the reduction of 21 percent of Automated Collection Service (ACS) contact representatives and 28 percent of Field Collection revenue officers.
This has resulted in the ACS answering 25 percent fewer taxpayer telephone calls since 2011, because there were fewer ACS contact representatives available to answer them. Taxpayers whose calls were answered spent an average of eight minutes (97 percent) longer waiting for a contact representative. In addition, ACS inventory grew and became older, and more cases were not resolved and were transferred to the Queue, a data base that houses delinquent accounts that the IRS is unable to work.
“There is a significant correlation between the IRS’s reduced collection budget and the reduction in efficiency and effectiveness of its collection operation,” said J. Russell George, Treasury Inspector General for Tax Administration. “The availability of key collection employees directly affects taxpayer service and the IRS’s ability to take appropriate enforcement action on delinquent taxpayers,” he said, adding, “Taxpayers may become frustrated and remain noncompliant if they are unable to reach a contact representative to resolve their tax issues.”
In FY 2014, revenue officers collected $222 million (7 percent) less than in FY 2011. In addition, they closed 34 percent fewer cases. This was primarily due to the decrease in the number of revenue officers.