28-year veteran of IRS,now to reveal how agency is failing in mission to serve American people

[J_J_]

Michael Gregory here. In short, per the title of the letter: The Wheels are Falling Off the Wagon at the IRS, and Congress needs to take action now to properly fund their own mandates. As things stand, Congress has asked the IRS to do more things while simultaneously funding them less, and continues to make the tax code ever more complex - ultimately, the fallout from their (in)actions will land on honest American taxpayers, benefiting individual and corporate tax cheats and identity thieves.

You may have seen my r/IAMA interview on the front page of Reddit with 3,500+ votes last week, but below is a new summary of salient points from the now-released and public open letter. Also, to see the funding shortfall graphically, click here to Imgur. Now is the time to act. Write your representatives and remember to vote! Edit: please note that this wasn't intended to be an AMA, but we are planning to schedule one with the mods in the coming weeks!

The IRS is responsible for raising 90 percent of the revenue coming into the federal government. The total revenue raised in 2013 was $2.9 trillion. Thus the IRS raised $2.6 trillion in 2013.

The IRS budget in 2013 was $11.8 billion. In 2010 the IRS budget was $12.3 billion; in 2015 the IRS budget is expected to be $10.2 billion. There has been a 17% reduction in funding of the IRS between 2010 and 2014 or stated differently a 25% reduction in real dollars.

The non-partisan IRS Oversight Board recommended a $12.5 billion budget for 2015 which the IRS needs to be fully funded. The House of Representatives is currently recommending $10.2 billion budget for 2015, which is an 18% reduction in funding.

The IRS raised $2.6 trillion in 2013 on a budget of $11.8 billion, the total cost per dollar raised by the IRS is less than one-half cent per dollar ($.0045/$1).

The IRS through enforcement of the tax laws brings in $4 to $7 in additional revenue to the federal government for every $1 expended. An 18% reduction in funding represents a loss in revenue to the federal government of $9.2 billion to $16.1 billion.

Through enforcement actions the IRS brings in approximately 2.5% of the $2.6 trillion that it raises. That means that approximately 97.5% of the money raised by the IRS is collected through taxpayers that voluntarily comply with the tax laws.

There has been a 15% increase in delinquent accounts between 2010 and 2014. In 2010 there were 10,391,000 delinquent accounts. In 2013 there were 11,721,000 delinquent accounts, with an estimated 12,000,000 in 2014.

There has been a 21% decrease in exam returns audited between 2010 and 2014. In 2010 there were 1,835,883 exam returns audited. In 2013 there were 1,558,057 exam returns audited, with an estimated 1,460,000 exam returns audited in 2014.

The field audit rate for audits is now at 0.25% and the percentage is continuing to decline due to the continuing decline in the number of employees available to do audits.

There has been 15% reduction in the IRS workforce since 2010. In 2010 the IRS employed 94,346. In 2013 the workforce had been reduced to 83,613, and in 2014 the workforce has been reduced to approximately 80,000.

The IRS historically helped 500,000 poor, disabled and elderly with their returns. Now the IRS doesn’t help any of them with direct return preparation according to Nina Olson, IRS Taxpayer Advocate.

In 2009 59,000 Americans were victims of identity theft. In 2013 that number was 3,000,000 with $5.2 billion stolen from the U.S. Government. In 2016 it is estimated identity theft will grow to $21 billion.

The year 2006 was the last year research analysis was conducted on compliance by American taxpayers. In that year compliance was 83% which means there was a 17% tax gap overall. Research has not been funded subsequently to determine the current tax gap, so we don’t know how bad it is today.

If voluntary compliance with the tax code drops by 1 %, the cost to the U.S. government is $30 billion per year.

Practitioners working on returns can count on a typical wait of 45 minutes and not necessarily speak with the right person to help them with their concerns or a person properly trained to assist them.

The IRS closed two major criminal cases resulting in $2 billion and $7 billion. Now Congress wants to cut the staff in CID in half by 2016 from approximately 3,500 to 1,600.

Congress needs to know where you stand on this issue, so vote, write and spread the word! Eventually (in coming weeks or months), I would like to come here to do a more AMA-type post, but in the meantime I will try to check back in on this later and try to answer some questions if applicable (won't be before tomorrow, though). Thanks for reading!

http://www.reddit.com/r/politics/comments/2l0spf/i_am_a_28year_veteran_of_the_internal_revenue/