Even as the IRS’ duties have grown with the passage of the Affordable Care Act, the agency has had to do more with less. In real terms, the agency’s budget has declined by 14 percent since 2010 while its staff has shrunk by 11 percent over the same time period. But that’s not enough for House Republicans. On Monday they passed a harebrained amendment slashing the IRS’ tax-enforcement budget by $1.2 billion, a 24 percent reduction.
Republicans claim to care about the budget deficit. Hamstringing the country’s revenue collection service is a decidedly ineffective strategy to that end. The IRS receives $255 in tax collections for every one dollar it is appropriated, according to The National Taxpayer Advocate’s 2013 report to Congress. At a time when the agencies already undercollect $385 billion in taxes due to weakened enforcement, the answer is more funding, not less.
The toxic “starve the beast” mentality that has so enthralled Republicans is partially to blame, as are the irresponsible efforts of congressmen like Darrell Issa to use investigations into IRS treatment of tax-exempt groups as an excuse to drum up a wider scandal by searching for an unsubstantiated link to the White House.
Though the agency erred in over-zealously targeting Tea Party groups, these investigations were not without reason. Groups applying for tax-exempt status as social-welfare groups under the 501(c)(4) section of the tax code are supposed to use their funds “exclusively” for community benefit or education. Like it or not, the job of the IRS is to make sure such exemptions are legitimate.
Much of the money that the IRS fails to collect comes from extremely wealthy citizens with complicated returns, not from middle-class Americans. If Republicans in Congress were to succeed in cutting IRS funding, it would effectively give the rich another tax break not available to the rest of us.