Budget Cuts Leave IRS Overwhelmed

A government watchdog says the Internal Revenue Service can't keep up with surging tax cheating and isn't sufficiently collecting revenue or helping taxpayers.

National Taxpayer Advocate Nina Olson says Congress must share the blame for disarray at the IRS. In her annual report to lawmakers, Olson noted Congress repeatedly cut the agency’s funding even as its workload grew larger and more complex.

Olson, an independent watchdog within the IRS, says the agency is relying more on software designed to weed out fraud. But errors are abundant, creating even more work for the agency when taxpayers dispute its findings.

Bruce McGovern is a professor and associate dean at South Texas College of Law.

“This is really a serious problem, because ultimately the IRS’s inability to address tax fraud effectively puts more burden on honest taxpayers. And it contributes to the perception of taxpayers that the US tax system is unfair, and that’s a dangerous state of affairs.”

The agency processes more than a 140 million individual tax returns annually, including almost a 120 million requests for refunds.

Bio photo of Andrew Schneider

Andrew Schneider

Business Reporter

Andrew Schneider joined KUHF in January 2011, after more than a decade as a print reporter for The Kiplinger Letter...