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August 01, 2014

Internal Revenue Service Funding

Following House passage in July of an appropriations bill that would reduce Internal Revenue Service (IRS) funding in fiscal year 2015 to its lowest level in 10 years, the ABA reiterated support for ensuring that the IRS receives adequate funding to carry out its mission of taxpayer service and enforcement of federal tax laws. The appropriations bill, H.R 5016, includes $10.95 billion for the IRS – a $340.6 million cut from fiscal year 2014 amount and $1.5 billion below President Obama’s request. In a July 21 letter to the leaders of the House and Senate Appropriations Subcommittees on Financial Services and General Government, then ABA Section of Taxation Chair Michael Hirschfeld noted that the following consequences might occur if the IRS is not adequately funded: a decrease in federal revenue; a lack of necessary IRS personnel; a negative effect on the IRS’s ability to administer the laws Congress enacts; a decrease in the quality of taxpayer service; and elimination of volunteer services programs that aid elderly and low-income taxpayers. Hirschfield emphasized that last year the IRS was able to answer only 61 percent of the calls it received from taxpayers and faced approximately 690,000 cases of identity theft. In addition, decreased funding already has negatively affected the ability of taxpayers to meet with the Office of Appeals to resolve their cases administratively. In addition, nearly 92,000 volunteers assisted with 3.3 million returns through volunteer programs administered by the IRS that would have to be eliminated if funding were cut. Hirschfeld wrote that the ABA recognizes the intense challenges Congress faces regarding the federal budget, but stressed that the association does not believe that that the IRS can appropriately fulfill its obligations without adequate funding. The Senate version of the legislation, which has been approved by an appropriations subcommittee, includes $11.5 billion for the IRS, a 2 percent increase for the agency.

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