Report: IRS budget cuts hurting revenue collection

Shrinking resources are hurting a key IRS system that collects outstanding taxes, potentially leading to lost revenue for the federal government, according to a new report. 

{mosads}Treasury’s inspector general for tax administration found that the IRS’s Automated Collection System (ACS) had lost almost 40 percent of its workforce since 2010, before the agency’s budget started decreasing in recent years.

The inspector general added that, because the IRS makes answering phone calls a top priority, the fewer workers in the ACS have had a harder time closing cases and collecting revenue.

“IRS management should take steps to ensure that inventory routing and ACS resource capabilities are aligned with overall IRS tax administration priorities and their vision for the role of the ACS in the Collection enforcement strategy,” Russell George, the tax administration inspector general, said in a statement.

IRS officials have made reversing recent budget cuts a top priority, and advocates for more resources say it would allow the agency to bring in revenues that are currently owed but uncollected.

But in the wake of the agency’s Tea Party controversy that broke in May 2013, Republicans have shown no interest in helping out the IRS.

In recent years, the inspector general found, ACS workers have moved deliquent tax cases into a to-do inventory that was rarely whittled down, while agency officials made no changes to deal with the influx of cases.

The audit added that the inventory is growing, the cases on it are generally older and the agency was taking fewer enforcement actions as revenues declined.