NAEA Responds to Proposed IRS Budget Increase

For Immediate Release

Contact: Gigi Thompson Jarvis
gjarvis@naea.org, 202.822.6232, x11

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NAEA Responds to Proposed IRS Budget Increase

WASHINGTON, DC (March 28, 2012)—The Administration’s fiscal year (FY) 2013 budget request of $12.76 billion for the Internal Revenue Service (IRS) is necessary if IRS is to manage its expanding workload, according to the National Association of Enrolled Agents (NAEA), the professional society that represents the only federally-licensed tax practitioners with unlimited representation rights.

“We believe the IRS requires adequate levels of funding in order to carry out its tax administration duties: namely, to inform, educate, and assist those taxpayers who attempt to comply voluntarily with the tax laws, and to compel compliance from those who fail to file returns, report income accurately, and pay their tax obligations,” wrote NAEA President Sherrill Trovato, EA, USTCP in a March 15 letter to Subcommittee on Financial Services and General Government Committee on Appropriations Chairman Richard Durbin and Ranking Member Jerry Moran.

As asserted by the IRS National Taxpayer Advocate Nina Olson in her 2011 Annual Report to Congress, the most serious tax problem encountered by taxpayers is that IRS is not adequately funded to serve taxpayers and collect taxes. Olson explained that additional funding has become necessary due to the substantial expansion of the IRS workload during recent years, stemming from factors such as:

• the increasing complexity of the tax code and its frequent changes;
• the service needs of an increasingly diverse taxpayer population;
• a surge in refund fraud and tax-related identity theft; and,
• the need to implement new third-party information reporting requirements.

IRS funding was reduced slightly from FYs 2010 to 2011, and has been cut by an additional 2.5 percent in 2012.

Although the Administration’s requested FY 2013 budget of $12.76 billion is $944.5 million more than the FY 2012 budget as enacted, Trovato and NAEA expressed concern over the level of funding for taxpayer assistance. The proposed target FY 2013 customer service representative level of service is 63 percent, only a slight improvement over the FY 2012 target of 61 percent, which is widely considered inadequate. IRS’s ability to answer taxpayer telephone calls and its ability to respond to taxpayer correspondence are important measures of the Service’s customer service and neither has been judged outstanding by enrolled agents in recent years.

Trovato stressed that, “When taxpayers and taxpayer representatives, such as enrolled agents, cannot reach trained, competent IRS staff in a timely fashion, everyone loses.” 

The letter also addressed the importance of funding modernization of IRS’s antiquated computer systems in order to ensure IRS workers have access to the taxpayer data they need in their interactions with taxpayers and their representatives. 

In conclusion, Trovato noted that “IRS interacts with more citizens than any other agency of the government, and America’s unique system of self-assessment requires a tax administrator that is capable of providing timely, complete, and accurate responses to taxpayer queries…IRS cannot provide the requisite numbers of trained personnel without appropriate budgets.”

Trovato’s complete letter may be read here: http://www.naea.org/node/333