Despite enforcement success, IRS faces cuts
Every dollar that the Internal Revenue Service spends on audits, liens and property seizures from tax cheats brings in more than $10, a rate of return so good that the Obama administration wants to boost the agency's budget.
But House Republicans, wary of the too-heavy hand of government, differ. They voted to cut the IRS budget by $600 million this year and want bigger cuts in 2012.
The IRS has dramatically increased its pursuit of tax cheats in the past decade. Audits are up, property liens are up, and asset seizures are way up. President Obama and Democrats in Congress see stepped-up enforcement as a good way to narrow the nation's budget deficit without raising taxes or cutting popular programs.
"It makes little sense to cut the agency that collects revenue," said Rep. Jose E. Serrano (N.Y.), the top Democrat on the House subcommittee that oversees the IRS budget.
Republicans, however, see the IRS as an ideal target for their promise to reduce government spending, in part because the agency will play a big role in implementing the new health-care law.
But the budget cuts go deeper than health care, reflecting GOP concerns about an agency that affects nearly every business and adult in the nation.
"We're hearing from small businesses a repeat of the horror stories from more than 10 years ago," said Rep. Patrick J. Tiberi (R-Ohio), chairman of the House Ways and Means subcommittee on select revenue measures. "I think you will see House Republicans have a real discussion about the role of the IRS in this country."
- Associated Press