IRS: Budget cuts could delay refunds

Greg Nash

Budget cuts backed by congressional Republicans could delay tax refunds in 2015, IRS Commissioner John Koskinen told reporters on Thursday.

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“Everybody’s return will get processed,” Koskinen said at a news conference. “But people have gotten very used to being able to file their return and quickly get a refund. This year we may not have the resources.”

Koskinen painted a dire picture of the fallout from the $346 million cut that the IRS received in the recent year-end spending deal. Because of a government-wide pay raise next year, the IRS will have to pay out an extra $250 million in salaries and other expenses — creating in essence, Koskinen said, a $600 million hole for the agency to fill.

Already, Koskinen told employees this week that the agency would have to stop handing out overtime, in all but emergency situations, and freeze hiring. The IRS will still hire temporary staff to help out during the filing season, Koskinen said Thursday.

Still, the commissioner stressed that the budget cuts will undoubtedly make life more difficult for taxpayers once the 2015 filing season opens. Taxpayers trying to reach the IRS will have only about a 50-50 shot at getting their call answered — and those that do can expect to be on hold for awhile, Koskinen said.

One group that will be helped by the budget cuts are taxpayers trying to evade their bill, Koskinen said, labeling the funding reduction a “tax cut for tax cheats.”

“There isn’t any more give in the system,” the commissioner said. “You make any further cuts in this organization and the wheels are going to start falling off.”

The cuts to the budget come as Republicans remain angry over the IRS’s improper scrutiny of Tea Party groups, a controversy that broke more than 19 months ago.

Koskinen said he and senior IRS officials continue to lobby lawmakers of the dangers of underfunding the agency but also pointed out that Congress started to slash the IRS’s budget well before former agency official Lois Lerner acknowledged the singling out of conservative organizations.

The commissioner added that he wouldn’t rule out worker furloughs, which essentially shutter the IRS for an entire day at a time, but called that step a last resort for an agency that will get $10.9 billion this fiscal year, down from a high of $12.15 billion in 2010.

“At some point, we’re going to set a new American record for the number of years in a row we get a budget cut,” Koskinen said at the news conference to discuss resources for taxpayers during the filing season.

Furloughs would save the agency around $29 million per day, Koskinen said.

He did note that he didn’t expect the budget cuts to delay the start of the filing season early next year, nor would a deal Congress passed this month to restore dozens of expired tax breaks for 2014.

The IRS had warned lawmakers that it might have to delay the tax season if those tax breaks weren’t extended before the end of November. But the agency has also yet to set a starting date for the 2015 filing season, and Koskinen said Thursday that other factors, like implementing the IRS’s role in the Affordable Care Act, have complicated preparations for next year.