Going into the 2015 filing season, IRS Commissioner John Koskinen cautioned taxpayers that cuts to the agency’s budget would impair customer services. In recent weeks, Koskinen and other IRS officials have reported mixed results from the agency’s efforts to cut costs.
The IRS is operating under a $346 million budget reduction compared to last year. In March, Koskinen told Congress that the agency has absorbed that budget cut by imposing a hiring freeze, reducing training and travel, delaying business systems modernizations, and eliminating nearly all overtime. Koskinen reported that the IRS has delayed critical investments in IT by more than $200 million, which are needed to protect taxpayer data, combat identify theft, address noncompliance and fight against cyberattacks.
Guidance and enforcement
In a March speech before tax professionals, Koskinen acknowledged that the budget cuts may delay the publication of formal guidance. IRS Chief Counsel William Wilkins echoed similar remarks. Wilkins reported that the IRS “is having to do less with less.”
Enforcement also is impacted, Koskinen stressed. The IRS has 13,000 fewer permanent full-time employees than it did in 2010. The staffing problem has resulted in a drop in the IRS’s audit rates of individual taxpayers, a trend Koskinen called ”deeply disturbing.”
Koskinen added that customer service, particularly the agency’s telephone assistors who answer questions from taxpayers, would not be spared from the budget reductions. Koskinen told lawmakers that the IRS is answering approximately 50 percent of calls from taxpayers. National Taxpayer Advocate Nina Olson, at a separate Congressional hearing, reported that the answer rate is sometimes lower. As April 15 approaches, the IRS is bracing for even more calls from taxpayers.
Koskinen and other IRS leaders have recommended that taxpayers look to the IRS website for answers to frequently asked questions. The IRS has an online refund tool, Where’s my Refund?, which enables taxpayers to track the progress of their refunds. The IRS also has online tools for transcript requests.
Several times since January, Koskinen indicated that the IRS explored the possibility of two or more employee furlough days to save money before the end of the current fiscal year. In March, Koskinen said that the agency will avoid employee furlough days. Elimination of all hiring and overtime, along with cuts in other areas, generated sufficient savings to make furlough days unnecessary, he told employees.