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IRS Diverts Funding Away from Customer Service, Says New Report

April 22, 2015 — Press Releases   

WASHINGTON Today, the Ways and Means Committee released a new report on the IRSs exceedingly poor customer service during the 2015 tax-filing season. Despite the IRSs claim that its lackluster performance was due to budget cuts, the committee has found extensive evidence that the IRS deliberately cut funding for customer service that was fully under its control

These findings are deeply troubling, said Ways and Means Chairman Paul Ryan (R-WI). At all times, but especially during tax season, the IRS should put the taxpayer first. But instead, the agency cut funding for the very customer service that taxpayers rely on. The IRS has a lot to answer for, and the Ways and Means Committee is going to hold it accountable.

The reportentitled, Doing Less with Less: The IRSs Spending Decisions Harm Taxpayerslays out the IRSs questionable decisions in detail. Among its findings:

  • This IRS made a 73 percent reduction in user fees allocated to customer service, and a 6 percent decrease in total funding for taxpayer assistance. 
  • The IRS awarded $60 million in bonuses to its employees, at a time when the IRS did not yet know what its budget would be for fiscal year 2015.
  • The amount of time IRS employees spent on union activity would allow for over 2 million additional taxpayer-assistance calls.
  • If the IRS contracted with private debt collectors it could increase its own enforcement budget by more than $100 million every year.
  • The IRS prioritized Affordable Care Act implementation over other activities, including taxpayer assistance.
  • The rate of improper payments of the Earned Income Tax Credit has remained consistently high regardless of the IRSs funding rate.
  • Not only did the IRS spend $2.1 million on litigation services that the government could easily have performed itself, but it may have improperly shared confidential taxpayer information.
  • Although the IRS has made several unsuccessful IT investments, the IRS successfully implemented a comprehensive IT system to implement the ACA.
  • At the end of fiscal year 2014, the IRS estimated total tax delinquency was 3.12 percent for federal employees, representing over $3.5 billion owed in taxes.

To read the whole report, see here.

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SUBCOMMITTEE: Oversight    SUBCOMMITTEE: Full Committee