Several years straight of restricted funding are starting to catch up with the IRS’s ability to provide service to taxpayers, enforce tax laws and keep IT current, according to the agency.
IRS Commissioner John Koskinen recently sent a memo to employees saying he has to keep in effect a hiring freeze and limits on overtime and temporary hours. He further warned employees of the possibility of two furlough days later in this fiscal year similar to the sequestration-imposed furloughs the agency used in 2013, along with a number of other agencies.
“Congress approved a $10.9 billion budget for us, which means we must absorb a cut of $346 million during the remaining nine months of the fiscal year. But that really amounts to a total reduction of about $600 million when you count another $250 million in mandated costs and inflation. This is the lowest level of funding since 2008, and the lowest since 1998 when inflation is considered,” he wrote.
Operational impacts include delays of critical IT investments that will degrade taxpayer service, delay new protections against theft of taxpayers’ identity, and increasing the risk of downtime from the current aging systems; an reductions in enforcement activities resulting in fewer audit and collection cases at a cost of a projected $2 billion in lost revenue.
In addition, he said, those who file paper taxes, especially, likely will have to wait a week or more longer for any refunds they are due, those with errors or questions that require manual review will face further delays, the backlog in correspondence will grow; and in-person and phone service will be degraded.
