The Senate Appropriations Subcommittee on Financial Services and General Government on July 22nd approved a fiscal year (FY) 2016 IRS funding measure that provides $10.475 billion, a cut of $470 million, or 4 percent, below the FY 2015 enacted level. Appropriators said the decrease in funds would require the IRS to streamline its activities and prioritize available resources, including user fees, to perform core agency duties.
The House on June 17th approved $10.1-billion to fund the IRS for FY 2016, representing a cut of approximately $838 million, compared to FY 2015. The funding level was $2.8-billion below President Obama’s budget request (TAXDAY, 2015/06/12, C.1).
The bill requires $2.247 billion be spent on taxpayer services, roughly in line with the House appropriations, reflecting an increase of $90 million, which the panel said is intended to significantly improve the handling of identity theft cases and IRS response rates to telephone calls and correspondence from taxpayers. The funding level, however, is $162 million less than the president’s request.
During the most recent filing season, the IRS answered only 37 percent of taxpayer calls routed to customer service representatives, and the hold time for taxpayers who got through averaged 23 minutes. This is a sharp drop-off in service from the 2014 filing season, when the IRS answered 71 percent of its calls and hold times averaged about 14 minutes. The number of disconnected calls skyrocketed to about 8.8 million, up from about 544,000 in 2014, reflecting an increase of more than 1,500 percent.
For IRS enforcement measures, the Senate level of $4.5 billion is $360 million less than FY 2015 and $548 million less than the administration’s request. Appropriators also cut IRS operations support, making the Senate level of $170 million less than FY 2015 and $960 million less than the administration’s request. Business systems modernization fared no better, receiving a $30-million cut from the FY 2015 level and $119 million less than the president’s request.
In addition, the Senate subcommittee added provisions that they said would “ensure accountability and transparency” at the IRS. The bill includes:
- A prohibition on funds for bonuses or to rehire former employees unless employee conduct and tax compliance is given consideration;
- A prohibition on funds for the IRS to target groups for regulatory scrutiny based on their ideological beliefs;
- A prohibition on funds for the IRS to target individuals for exercising their First Amendment rights; and
- A prohibition on funds for the production of inappropriate videos and conferences.