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Wyden: IRS Budget Cuts Affect Anti-Fraud Capabilities

by Mike Godfrey, Tax-News.com, Washington

04 September 2015


On September 2, US Senate Finance Committee Ranking Member Ron Wyden (D – Oregon) sent a letter to Internal Revenue Service (IRS) Commissioner John Koskinen asking how the cuts made by Congress to the agency's budgetary resources hamper its ability to crack down on tax fraud.

"Cutting enforcement spending, such as by performing fewer audits, will embolden tax cheats and increase deficits, heaping a new burden onto the backs of honest taxpayers," Wyden wrote in the letter. "Furthermore, cutting funding intended to modernize the agency's 1960s-era IT systems makes it easier for fraudsters to steal taxpayers' identities or hack into IRS computers."

"Cutting resources to the IRS and similarly-affected government agencies could essentially hand tax cheats and foreign crime syndicates the financial keys to the country," he commented.

In his letter, Wyden asks Koskinen whether "we should expect a surge in both the number of fraudulent tax returns filed using stolen taxpayer identities and the frequency of cyberattacks launched by foreign crime syndicates on the IRS."

According to the National Taxpayer Advocate, the IRS budget was reduced by 17 percent, after adjusting for inflation, between the 2010 and 2015 fiscal years (FYs). A further cut of nearly USD350m was made in December 2014.

In addition, an appropriations proposal for FY2016 would cut USD470m more, while also increasing taxpayer services by USD90m – "meaning the agency must absorb USD560m of cuts in its other mission-critical areas."

Wyden is looking for Koskinen to reply to the letter by October 2, 2015.

TAGS: compliance | tax | tax compliance | law | budget | Internal Revenue Service (IRS) | enforcement | tax authority | United States | Tax

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