In fiscal terms, the mission of the IRS trumps the missions of all other federal agencies. If the IRS lacks adequate funding to do its job effectively, the government will have fewer dollars to fund federal programs.
Since FY 2010, the IRS’s workload has grown, and its budget has been reduced by 8%. The combination of more work and less funding has predictably impaired the IRS’s performance. Last year, for example, the IRS could only answer 61% of customer service calls, and those who got through had to wait nearly 18 minutes on hold.
The requirement to pay taxes is generally the most significant burden a government imposes on its citizens. The National Taxpayer Advocate believes the government has a practical and a moral obligation to make compliance as simple and painless as possible. The report also presents research studies showing that top-quality taxpayer service has a significant influence on tax compliance.
The IRS is the federal government’s accounts receivable department and generates a substantially positive return on investment. In FY 2013, the IRS collected $255 for each dollar it received in appropriated funds. It is therefore self-defeating to treat the IRS like a pure spending program in which a dollar spent is simply a dollar spent. With the IRS, a dollar spent generates many dollars in additional revenue and thus helps to reduce the budget deficit.
Because the IRS is the federal government’s accounts receivable department and generates a substantially positive return on investment, it is self-defeating to treat the agency like a pure spending program. With most spending programs, a dollar spent is simply a dollar spent from a budget perspective. With the IRS, a dollar spent generates many dollars in additional revenue.