Monday, August 25, 2014

Costs and Benefits - the IRS Budget

I know I'm frustrated with long wait times when calling the IRS on behalf of a client. I'm confident that my colleagues in the tax preparation industry are as well. John Koskinen, Commissioner of the Internal Revenue Service has a suggestion for us and anyone else who has waited on hold for 2 or 3 or more hours to get a question answered or an issue resolved. Accounting Today says that advice is "to call their member of Congress."

As noted by the Commish, a 1% decline in tax compliance costs $30 billion in revenue. The IRS budget is $11 billion. Congress continually piles on the IRS work load (not just the ACA but every new complexity to the tax law) while cutting the IRS budget. Koskinen was also quoted in the Washington Post stating that every additional $1 budgeted for tax enforcement yields $4 of additional revenue.

Poorer service and decreased tax revenues causes the phrase "penny wise and pound foolish" to come to mind.

I agree with Commissioner Koskinen's advice. If you don't like incredibly long telephone wait times or if you don't like tax cheats getting away with their lawlessness, then call or write your Representative in Congress.