Robert J. Fedor, Esq., L.L.C.

Independent report sheds light on consequences of IRS budget cuts

Few Americans are fans of the Internal Revenue Service, yet drastic cuts to the federal agency's annual budget have ultimately served to punish everyday Americans. This belief was the underlying theme of a recent report provided to the agency by National Taxpayer Advocate, Nina E. Olson. In the report, Olson contends that continuous cuts to the agency’s annual budget have made the agency highly ineffective and punitive towards taxpayers.

Last year, politicians approved a 24 percent cut to the agency's budget. These cuts, however, often have unintended consequences and mainly serve to punish the average taxpayer. While many individual taxpayers and small business owners likely welcome IRS budget cuts and equate such cuts with fewer IRS auditors, these cuts also mean fewer IRS employees are available to answer questions and help taxpayers ensure they are in compliance with tax laws.

For example, during 2013 Olson found that those callers who managed to get through to the IRS's helpline were forced to wait an average of more than 17 minutes. During 2004, the average wait time was only 2.6 minutes. Additionally, the IRS's ability to handle and respond to written correspondence and requests from taxpayers has been severely hindered. This is particularly concerning considering that 76 percent of IRS audits and notices are communicated via snail mail. The IRS has established a 45 day timeframe to respond to a taxpayer's inquiry or request. During 2013, however, about 53 percent of letters and requests were not responded to within this timeframe.

Not only have IRS budget cuts forced the agency to reduce its workforce, but those workers who remain are often poorly trained and ill-equip to deal with many complex tax matters. Today a taxpayer who has questions about how to file their taxes is often left to figure out things on his or her own. As a result, errors are more likely to be made and the consequences of those errors can result in an individual being audited, penalized and even charged with tax crimes.

Source: Forbes, "Starve The IRS Beast, Punish The Average Taxpayer," Janet Novack, Jan. 9, 2014

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