Yet, if Trump’s spending plan takes effect, the general trend of punitive IRS budgets at the hands of a Republican-dominated Congress will be exacerbated, much to the detriment of fed-up taxpayers and frustrated employees.
In a letter to the House Appropriations financial-services subcommittee Wednesday, 48 Democrats called for a different approach — boosting the IRS budget to $12.9 billion for fiscal 2018, which begins in October. That would be a $1.7 billion increase over this year.
Trump’s proposed $239 million decrease isn’t much in comparison, but it comes on top of years of cuts. The high point, $12.1 billion, was in 2010.
“An increase in funding for the IRS will reverse the short-sighted and damaging budget cuts which have increased our national debt, left the IRS ill-equipped to combat refund errors and fraud, drastically reduced taxpayer services, dangerously reduced audits, and limits the IRS’s ability to implement new laws passed by Congress,” said the letter led by Rep. Keith Ellison (D-Minn.).
During his January confirmation hearing before Trump’s inauguration, Treasury Secretary Steven Mnuchin appeared sensitive to the need for more IRS employees.
“I was particularly surprised that at looking at the IRS numbers that the IRS head count has gone down quite dramatically, almost 30 percent over the last number of years,” he said. “I don’t think there’s any other government agency that has gone down 30 percent, and especially for an agency that collects revenues, this is . . . something that I’m concerned about.”
He implied Trump would be, too.
“I can assure you that the president-elect understands the concept of where we add people and we make money,” Mnuchin said. “. . . He’ll get that completely. That’s a very quick conversation with Donald Trump.”
Maybe he wasn’t listening.
IRS employees can help him understand.
“We’re already down. . . . We’re stretched as thin as we can go,” John Kelshaw, a Springfield, N.J., IRS employee, said by phone. “We’re at the point now where we can barely do the minimum.”
“We can’t provide quality service to the public,” Kelshaw said. “We just don’t have the bodies to do it.”
Meanwhile, the workload in the Hartford, Conn., IRS office is up “dramatically,” said Donna Roberts, a revenue officer for 26 years. IRS employees “want to do a good job,” she said, but poor morale makes it “hard to come to work when people are treated poorly and then the taxpayer doesn’t get service because everyone is burned out.”
Kelshaw and Roberts spoke in their roles as National Treasury Employees Union chapter presidents.
Although the administration’s budget blueprint links the IRS cuts to “diverting resources from antiquated operations that are still reliant on paper-based review,” the labor organization fears the impact will be on people — taxpayers and employees — not just on old systems.
“With tax season approaching, now is the perfect time to remind everyone that slashing the IRS budget further would make it harder for honest taxpayers to file and easier for cheats to get away,” said NTEU President Tony Reardon.
There was a budget increase in 2016 that improved service, but it was less than required cost increases and inflation. “The IRS is operating with 17,000 fewer full-time employees (FTE). In essence, the IRS has already sustained a 7.5% budget reduction, or 17% in real terms along with a seven-year hiring freeze since FY 2010,” the letter said. “. . . Additionally, as a direct result of the budget reductions, the IRS has lost about 14,000 permanent enforcement staff since FY 2010.”
That equals dollars and cents — $30 billion in lost revenue from reduced enforcement between 2010 and 2016, the letter added.
Budget cuts also hurt customer service, though by one metric it has been improving. The IRS projects its level of service will be decent this year, about 75 percent.
That’s not the only metric, however, and it can be misleading.
Although National Taxpayer Advocate Nina Olson told a House committee the IRS “is showing a much higher level of service” this year, it is answering fewer than 4 of 10 calls from those seeking to resolve delinquent debts.
“This is down 53 percent over the same period last year,” she said. “The hold time for the taxpayers who actually get through on this line is up even more significantly — from 10 minutes last year to 57 minutes this year.” Putting it differently for emphasis, Olson said that “the IRS is not accepting 63 percent of these calls, and it is making the other 37 percent of callers wait nearly one hour to get through.”
It was just two years ago that IRS Commissioner John Koskinen was unusually blunt when he said the agency provides “truly an abysmal level of service.”
No one wants to see that again.