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Top Republican to IRS: You say you’re broke. How can you afford 700 new employees?

Sen. Jason Chaffetz (R-Utah), left, and IRS Commissioner John Koskinen. (AP photos)

This post has been updated.

The chairman of a powerful House committee is demanding to know how IRS chief John Koskinen has found the money to hire up to 700 enforcement staffers when he told Congress a short time ago his agency was more or less broke.

Rep. Jason Chaffetz (R-Utah), chairman of the House Oversight and Government Reform panel, reminded the Internal Revenue Service commissioner in a letter that he told lawmakers in February that he “urgently needed” a billion-dollar budget increase next year to boost the agency’s enforcement staff.

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“Now, less than three months later, without that increase, you have announced plans to increase enforcement activities,” Chaffetz wrote. “The inescapable conclusion is that your testimony to Congress was inaccurate, reflecting either an attempt to exaggerate IRS’s budget needs or a management failure in understanding the needs of your organization.”

The Utah Republican’s May 6 letter, first reported by Fox News, is the latest attack by House Republicans on Koskinen’s management of the IRS since Congress launched a lengthy probe of the agency’s treatment of conservative groups.

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Chaffetz has been on a campaign since last October to impeach the tax collector, and Congress has cut the IRS budget by billions of dollars in the past five years.

Chaffetz demanded that the IRS produce a full accounting of where Koskinen found the money that will pay for up to 700 new hires this year, the hiring plans themselves and the paper trail showing how officials determined in February that they had to continue an exception-only hiring freeze that took effect in 2011.

“The ongoing decline in enforcement activities we’ve seen in the last several years has translated into billions of dollars of lost revenue for the government,” Koskinen told the Senate Finance Committee in February, according to Chaffetz’s letter.

Koskinen told IRS employees in a memo last week that the hiring spree would allow the agency to beef up an audit staff depleted by years of attrition and go after delinquent taxpayers.

He said the money for enforcement hires will be freed up by retirements, attrition and budget “efficiencies.” But he was not specific.

Koskinen told Chaffetz in a response obtained by The Washington Post that he will provide him with the justification for the hires. But he said the congressman seems to have a “misunderstanding about this initiative.”

“As I stated in my message to our employees, a copy of which I am enclosing for your convenience, the funding for this initiative results from the increased attrition in our enforcement forces this year, along with efficiencies we have found since September,” the IRS chief wrote.

But he said the extra enforcement staff still will leave the IRS with “at least 2,000 fewer employees” at the end of the year and about 5,000 fewer enforcement staffers than the agency had five years ago.

A spokeswoman for Democrats on the Oversight Committee described the Chaffetz letter as political posturing: “A simple phone call would have answered this question.”

Testimony from IRS Commissioner John Koskinen on the theft of tax payer information. (Video: AP)