IRS: "don't know what you got till it's gone".

• Author: Labant, Melissa
• Position: IRS funding

THE AICPA RECOGNIZES THAT THE IRS's budget is often the subject of debate (particularly given the recent allegations concerning the handling of certain taxpayer matters and travel expenses). Not surprisingly, IRS operations and its budget are also highly politicized, and particularly so this year because of those allegations. Nonetheless, the AICPA's position is that Congress should properly fund the agency for the sake of taxpayers as well as tax practitioners.

The author has received the impression from speaking with scores of tax practitioners that no one needs the IRS, until they need them. The title of a Cinderella song from the '80s, "Don't Know What You Got (Till It's Gone)," may reflect this somewhat underrealized dependence on the IRS. This column does not contend that the IRS is flawless. Nonetheless, continued funding of the agency is essential to the success of the nation's voluntary system.

Insufficient Funding

"[W]e believe that proper funding of the IRS's budget is essential to the IRS's ability to carry out its mission," Jeffrey A. Porter, chair of the AICPA's Tax Executive Committee, wrote in a letter to the Senate Appropriations Subcommittee on Financial Services and General Government. "The collection of tax revenues and the administration of tax laws, as well as the need to provide assistance to taxpayers and tax practitioners, are important responsibilities."

(The letter, dated Sept. 4, 2013, is available at tinyurl.com/q92ofxo.) However, the IRS's budget has been severely challenged in recent years. The IRS budget was approximately $11.8 billion in FY 2012, down from approximately $12.1 billion in FY 2011. The challenge for the IRS is even more dramatic, as the approximately $5.3 billion enforcement budget it received for FY 2012 was reduced by approximately $200 million from the prior year.

The AICPA is concerned that a further reduction in taxpayer service resources would negatively impact taxpayers and AICPA members alike. Specifically, there are concerns that another decrease in the IRS's budget would likely (1) increase wait times for incoming telephone calls from taxpayers and tax practitioners; (2) create excessive delays in responding to taxpayers' written inquiries and responses to IRS notices; (3) lead to the inability of IRS staff to meet and assist with the needs of taxpayers who visit walk-in taxpayer assistance centers; (4) result in the failure to keep taxpayers informed of tax law changes (via customer...