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IRS shutdown possible amid budget cuts, agency chief says

The Internal Revenue Service might shut down and send its employees home for a few days this summer if it can’t find a “reasonable way” to close an anticipated budget gap, according to the agency’s chief.

IRS Commissioner John Koskinen said at a Thursday news conference that furloughs might be necessary as a last resort if the agency runs into a budget shortfall as a result of the funding cuts Congress and President Obama imposed on it through recent spending legislation.

“There is no way we can say right now that [furloughs] wont happen,” Koskinen told reporters, according to a Politico report. He added that he might have to close the agency “for a day, two days, whatever days it would take to close the gap that we can’t otherwise close in a reasonable way.”

The commissioner said he would make a decision about furloughs by the end of summer.

“It’s a balancing act,” Koskinen said in a conference call on Thursday. “What we don’t want to do is take a shutdown day and then discover later in the year that things worked out in such a way that we didn’t have to do it.”

The recent spending package gave the IRS about $11 billion for 2015, reducing its budget by $346 million compared to last year. The 3 percent cut came despite the added responsibility of administering Affordable Care Act tax credits and penalties during the upcoming tax cycle.

Koskinen told IRS employees in an e-mail on Wednesday that the agency plans to suspend overtime, slash temporary-worker hours and halt new hires to save $180 million, in addition to trimming $160 million its tax-enforcement operations, according to a Federal News Radio article.

The IRS budget has steadily shrunk since 2009, dipping by more than 10 percent since then.

The National Treasury Employees Union, which represents IRS workers, has criticized Congress for reducing the agency’s budget for a fifth consecutive year.

“Today, the IRS is struggling to keep the lights on,” NTEU president Colleen M. Kelley said in a statement this week. “Not only do these cuts threaten our voluntary tax-compliance system, they also reduce the ability of the IRS to continue to collect 93 percent of our nation’s revenue.”

National Taxpayers Advocate Nina Olson said in a report on Wednesday that U.S. taxpayers will face the worst levels of IRS service in more than a decade during the upcoming filing season, with as few as 43 percent of callers reaching an agent.

Olson added that the IRS would shrink by about 17,000 employees this year while the number of taxpayers grows by 7 million.

Koskinen said in his email that his agency will miss out on at least $2 billion in IRS collections revenue because of this year’s cuts.