Finance

GOP: Poor IRS funding choices hurting taxpayers

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House Republicans intensified their criticism of the IRS’s customer service on Wednesday, lashing out at the agency for spending choices it said hurt taxpayers seeking assistance. 

John Koskinen, the IRS commissioner, has blamed years of budget cuts for reducing taxpayers services to “abysmal” levels.

{mosads}But Republicans on the House Ways and Means Committee are making the case with a new report that the IRS –which is receiving $10.9 billion this fiscal year – is getting plenty of funding and simply making poor choices with the money it gets.

“I’m concerned that the IRS, by its own admission, is doing ‘less with less’. And the IRS’s choices – and they are choices – on how to allocate resources have been deeply disappointing,” Rep. Peter Roskam (R-Ill.) said Wednesday at a hearing featuring Koskinen. 

Most critically, GOP lawmakers say, Congress did not cut the IRS’s budget for taxpayer services this year. At the same time, the IRS reduced by almost three-quarters, from $183 million to $49 million, its use of user fees for taxpayer services, the Republican report said. That drove an overall decrease of 6 percent in total funding for taxpayer assistance. 

In all, Republicans also say the IRS could have helped another 10 million taxpayers by limiting the $23 million the agency spent on union activities and $60 million allocated to employee bonuses.

“At all times, but especially during tax season, the IRS should put the taxpayer first,” Ways and Means Committee Chairman Paul Ryan (R-Wis.) said in a statement. “But instead, the agency cut funding for the very customer service that taxpayers rely on.”

Roskam, the chairman of the Ways and Means subcommittee that oversees the IRS, built on that criticism in Wednesday’s hearing, questioning the agency’s hiring of a “white-shoe” law firm to help with litigation. Other Republicans, including Rep. Kristi Noem (S.D.), charged that the IRS had made a conscious choice to hurt taxpayers.

Both the IRS and congressional Republicans agree that taxpayer services have fallen to unacceptable levels. By the end of the filing season, the IRS was answering fewer than two out of every five phone calls it received, or about half the goal of 80 percent the agency sets for itself.

Taxpayers who did get through had to wait, on average, more than a half hour to speak with an IRS staffer. Those who showed up at IRS assistance centers were often forced to wait for hours, to the point that many were showing up before sunrise to get in line.

Koskinen has placed the blame for those reductions squarely on budget cuts to the IRS, which received $12.1 billion in 2010. Republican interest in slashing the agency’s budget only intensified after the IRS admitted giving improper scrutiny to Tea Party groups seeking tax-exempt status.

At Wednesday’s hearing, Koskinen insisted that the most recent filing season went smoothly for taxpayers who didn’t need the agency’s assistance, and he praised the IRS’s ability to process tens of millions of returns.

But when it comes to helping taxpayers, the IRS chief made the case that the agency’s hands were basically tied. The IRS, Koskinen says, has to ensure that taxes are processed and must implement legislation from Congress, including ObamaCare.

That means the IRS has to make cuts in areas like taxpayer services, enforcement areas like audits, and information technology, the commissioner said. In fact, Koskinen said the decline in user fees for taxpayer services was instead spent to implement ObamaCare.

“It’s simply the matter of not having enough people,” Koskinen said.

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