IRS Plays Victim on Budget Cuts, Threatens Delay in Taxpayer Refunds

Michi Iljazi

January 26, 2015

There is probably no agency feared or disliked more in the federal government than the Internal Revenue Service (IRS). The IRS can make one phone call and wreak havoc on the lives of any working American, striking fear at a moments notice. Much of the disdain for the agency has grown in recent years as IRS bureaucrats have wasted taxpayer money on spoof seminar videos and lavish conferences, while others have been targeting political opponents in an attempt to stifle free speech. Now, the agency is complaining about recently passed budget cuts.

The budget cuts the IRS is lamenting were actually passed by the House back in July of 2014, under an amendment from Rep. Paul Gosar (R-Ariz.). Cristina Marcos reporting for The Hill detailed the amendment:

Rep. Paul Gosar’s (R-Ariz.) amendment to the fiscal 2015 Financial Services appropriations bill would cut funding for the IRS by $353 million. Specifically, Gosar’s amendment would cut that funding from the IRS enforcement account and use it toward deficit reduction.

Gosar argued that funding for the IRS would be better used toward reducing the deficit than toward the agency caught in GOP crosshairs.

That amendment was adopted by the House back in July, but found its way into the Cromnibus, which contained House passed appropriations and amendments. Although Rep. Gosar voted ‘no,’ on the CRomnibus, the Bill passed and the budget cuts for the IRS remained.

The budget cuts are an important message to the IRS that has wasted taxpayer money for years. The response from the IRS has been just about what you would expect from a government agency. Specifically, Commissioner John Koskinen came out swinging against the cuts and preemptively blaming the 3 percent budget reduction for problems that he predicted would come as well as a temporary shut down of the agency. The Washington Post noted that that:

The Internal Revenue Service might shut down and send its employees home for a few days this summer if it can’t find a “reasonable way” to close an anticipated budget gap, according to the agency’s chief.

IRS Commissioner John Koskinen said at a Thursday news conference that furloughs might be necessary as a last resort if the agency runs into a budget shortfall as a result of the funding cuts Congress and President Obama imposed on it through recent spending legislation.

“There is no way we can say right now that [furloughs] wont happen,” Koskinen told reporters.

These statements were nothing more than scare tactics. The agency was operating with a nearly $11 billion budget and they were able to get by and use some of that money on questionable spending, including $49 million spent on employee conferences and bonuses to IRS employees who haven’t paid their taxes.

The height of hypocrisy however comes from the money that the IRS could get right from their own backyard. Last year, just about a month after tax day (April 15), Gregory Korte at the USA Today reported on a massive amount of back taxes owed to the government:

Federal employees owe a total of $3.3 billion in back taxes to the federal government, according to Internal Revenue Service data released Thursday.

In all, 318,462 federal employees owed back taxes as of last Sept. 30 — an increase of 2.6% from the previous year. That puts the average tax bill at $10,391, according to IRS data obtained by USA TODAY under the Freedom of Information Act.

The lesson for the IRS and Commissioner Koskinen here is simple: the IRS has been wasting money and allowing billions in owed taxes to go uncollected long before these budget cuts. The problem isn’t about how much money is being appropriated to the agency, the problem is how it is being spent: lavish conferences, stupid parody videos, political targeting, and bonuses to tax-delinquent employees. The IRS must remedy these problems to prove that they are capable of fixing the real issues plaguing the agency.

TPA will continue to monitor what Commissioner Koskinen and other officials have to say regarding the implementation of these budget cuts, but taxpayers have little reason to like the IRS anymore today than they did yesterday.