Yahoo Finance Happy Tax Day! Even The Treasury Department Thinks The IRS Is Terrible.
The Treasury Department wants you to be aware that it knows the Internal Revenue Service is not so wonderful.
To mark the Monday deadline for filing federal income tax returns, Treasury put out a lengthy statement lamenting the sorry state of the IRS, which the department oversees.
“Today’s deadline is an inflection point in what has been the agency’s most challenging filing season in recent history,” Natasha Sarin, Treasury’s counselor for tax policy and implementation, wrote on the agency’s website, blaming “chronic underfunding that has starved the IRS of the tools it needs to serve the American people.”
The IRS is still behind on millions of tax returns from last year, thanks to antiquated technology that forces agency employees to have to open paper returns by hand. And new tax laws have given the agency new responsibilities, such as distributing child tax credit payments to families with minor children.
“The IRS knew walking into this filing season that it did not have the workforce or technology in place to serve the American people the way they deserve ― to pick up the phones when taxpayers call, to help them access all the credits and benefits to which they are entitled, and to ensure that each and every taxpayer receives their refund quickly,” Sarin wrote.
But bad customer service doesn’t simply stem from bad bureaucracy ― it results from political choices made by Congress over the years, adding to the IRS workload while starving the agency of additional funding. The IRS budget is 20% lower today than it was in 2010, after adjusting for inflation, according to the Center on Budget and Policy Priorities, and the agency has 20,000 fewer employees.
Today’s deadline is an inflection point in what has been the agency’s most challenging filing season in recent history.Natasha Sarin, Treasury counselor for tax policy and implementation
Of course, tax filing would still be annoying for most people even if the IRS had more staff and better IT. Most Americans are eligible to file their taxes online for free, but hardly any use the “free file” program. Instead, the IRS has essentially outsourced the tax filing process to private companies like Intuit, which can charge hundreds of dollars even for relatively simple returns. Proposals that would allow the IRS to beef up its free filing options orfill out tax forms automatically never gain steam, even though the agency already has complete wage information for the majority of Americans with regular payroll jobs.
Democrats have sought to give the IRS a major funding boost to help the agency close the “tax gap,” the difference between what Americans owe in federal income taxes and what they voluntarily pay. Estimates put the annual gap in the hundreds of billions; Democrats wanted to use the higher revenue to help pay for an ambitious social spending bill, but the legislation has stalled.
Republicans, meanwhile, have vilified the IRS for years and have resisted additional funding. They dubiously claimed during Barack Obama’s administration, for instance, that the agency unfairly audited conservative nonprofits.
Sen. Mike Crapo (Idaho) ― the top Republican on the Senate Finance Committee, which oversees tax policy ― said at a hearing last week that the IRS budget is not lower than its historical average (despite the decline since 2010) and that Democratic proposals to boost its budget would ultimately burden taxpayers.
“I remain concerned about a huge funding boost that would increase audits on small businesses and middle-class Americans rather than prioritize taxpayer services,” Crapo said.
This article originally appeared on HuffPost and has been updated.
