The 2019 winter government shutdown was another blow to the beleaguered agency that collects your taxes and checks to see whether your FBAR is all that it should be.
We have talked about the continuing decline of a once powerful federal agency. Continued defunding has strapped the agency for financial and human resources in its mandate to enforce tax legislation and collect taxes that keep the government running.
A recent article in The Washington Post reported the shutdown would continue to impact IRS operations for the next year.
In 2018, the National Taxpayer Advocate expressed concern about the abilities of the IRS to adequately maintain its responsibilities noting, “…the reduction in IRS funding since FY 2010, approximately 20 percent in inflation-adjusted terms, has challenged the agency’s ability to perform the basic tasks of administering the tax system.”
Many people are unaware of the role played by the National Taxpayer Advocate (TAS), an independent watchdog group within the IRS that works to protect the rights of taxpayers. In reporting on the agency, the TAS notes that some of the deficits caused by the diminished IRS budget include:
- An inability to meet the service needs of taxpayers, through telephone service or follow up to questions. Although a call to the IRS is pretty much any consumer’s nightmare, we still make about 100 million calls to the agency each year. The IRS notes it can field only between four to six out of every ten calls to the agency each year.
- Outmoded technology and IT support continue to plague the agency. In 2018, the IRS website crashed on April 15, Tax Day, just as millions of taxpayers were trying to file their returns electronically.
- In 2018, the TAS noted the “IRS also has the lowest individual audit rate in memory (0.6 percent) and its collection actions are way down.”
Sweeping changes to tax regulations continue to generate concern for taxpayers and tax lawyers working to help clients avoid allegations of tax fraud or other criminal tax charges. States the TAS, “The significant cuts to the IRS’s budget combined with the need to implement several significant new laws in recent years has stretched the IRS very thin.”
While a poorly funded tax agency may lead to fewer IRS criminal investigations, it is also a sign of an institution and a government that may get things wrong during an IRS audit or other tax controversy. If contacted by the IRS, be sure to speak with an experienced tax attorney before you return the call.
Skilled tax defense if you face an IRS criminal tax investigation
At Robert J. Fedor, Esq., LLC, we deliver experienced legal representation if you are questioned about a tax crime or your foreign holdings. With offices in Chicago and Cleveland, we serve local and international clients. Call 800-579-0997 or contact us today.