TaxProf Blog

Editor: Paul L. Caron, Dean
Pepperdine University School of Law

Thursday, June 18, 2015

TIGTA: IRS Budget Cuts Had Minimal Impact On Tax Collections

Washington Examiner, Watchdog: IRS Cuts Had Minimal Impact on Tax Collections:

The government watchdog released a report Wednesday indicating that the ability of the IRS to collect taxes hasn't been hurt too dramatically by sharp budget cuts the agency has seen since 2010.

The Treasury Inspector General for Tax Administration's report said tax collection has softened somewhat, but data in the report shows that revenues haven't fallen that far in some cases, and that some revenues have increased over the last few years. ...

[T]he report showed that ACS collections were $3.2 billion in 2010, when there were 2,817 ACS workers, and $3.1 billion in 2014, when there were 2,234 ACS workers. The report admitted that's "slightly less" in collections after a more than 20 percent cut to the workforce. While collections fell to $2.8 billion in 2012, collections have actually been rising since then, and have been nearly flat over the entire period, even as the number of workers have fallen.

A similar pattern was seen in the IRS' field collection efforts. The IRS has about 400 field offices around the country, and the budget for those offices has fallen by nearly $200 million between 2010 and 2014, leading to a drop of more than 1,000 employees.

A similar pattern was seen in the IRS' field collection efforts. The IRS has about 400 field offices around the country, and the budget for those offices has fallen by nearly $200 million between 2010 and 2014, leading to a drop of more than 1,000 employees.

But collections from field offices have fallen only slightly over the last few years. These offices collected $3.0 billion in 2014 with 2,963 employees, down from $3.1 billion in 2010, when it had 4,140 employees. That's $100 million less in collections after a more than 25 percent cut to the workforce.

Collections from these field offices actually increased from 2010 to 2012, as the number of employees fell, and then decreased from that peak.

https://taxprof.typepad.com/taxprof_blog/2015/06/tigta-watchdog-irs-cuts-had-minimal-impact-on-tax-collections.html

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Comments

shouldn't the rising economy also be contributing to the IRS having more to go after when ACS actually makes contact? In fact I believe the report states that as an IRS management position. If true, would it not behoove ACS to have more people to go after more money?

Posted by: Daniel | Jun 18, 2015 12:34:27 PM

Yes. Collections should increase when the economy grows and when tax rates increase. So if you factor that in, the budget cuts probably had a pretty big negative effect on tax collections.

Posted by: Meh | Jun 19, 2015 5:17:49 AM