In recent months, the IRS has complained that it doesn’t have the budget to properly enforce tax law or to provide adequate customer service. IRS Commissioner John Koskinen recently pointed out that budget cuts mean that the agency will be unable to replace up to 1,800 workers.
However, the IRS just announced that it is adding 700 new workers to help with audit and enforcement. This comes on the heels of information that IRS audits of individuals dropped to a low not seen for 11 years.
Could You Be Audited?
The new personnel means that there is a greater chance that your tax return will be audited. However, even with the new audit and enforcement officers, some think that there still aren’t enough staff members to adequately accomplish the job. As a result, your tax return might be safe from audit.
If you are audited, it’s important to remember that most audits only require that you turn in some sort of documentation indicating why you have paid what you owe. As long as you keep good records, there is a good chance that you will be able to resolve the situation through the mail. Keeping good records is essential if you want to stay on top of your tax situation.
Even though there is a lot of fear around the idea of an audit, and a worry that you could be next, the reality is that less than one in 100 citizens are actually audited.
Lawmakers Aren’t Sure the IRS Needs a Bigger Budget
The latest news that more personnel has been added — shortly after complaints of budget shortfalls — is adding another dimension to an ongoing battle between the IRS and some lawmakers. There are a number of lawmakers who are interested in keeping the IRS budget low, and point to these latest hires as evidence that the IRS is doing just fine with its smaller budget.
Different bills have come through the House that are aimed at holding the IRS more accountable. Some of the bills include a restriction on re-hiring IRS employees who were fired for misconduct, and guidelines related to paying bonuses to IRS employees.
Wrangling about the IRS comes as concerns are raised about security, due to recent data breaches associated with the IRS, as well as an increase in tax fraud. Some think that some of the money sent to the IRS might be more profitably used for shoring up cybersecurity and cracking down on fraud, rather than worrying too much about audits and enforcement. On the other hand, audits and enforcement are some ways to ensure that the proper amount of revenue comes to the government’s coffers.
It looks as though the troubles for the IRS are far from over. Scandals are still the order of the day, and lawmakers are using them as fuel for their own agendas to reducing funding — or even eliminate the IRS altogether. In an election year, it might be interesting to see how rhetoric about the IRS is used, and what might be next for tax policy.