Georgia residents may have heard that watchdog groups believe the IRS needs more resources to effectively do its job. This was according to testimony given to a House subcommittee by the Treasury inspector general for tax administration. It was also the opinion of a tax advocate who also gave testimony on May 23. However, neither had actually seen the budget before coming to this conclusion.
The IRS commissioner has said that the agency would be able to close the tax gap if it had more money and people. The tax gap is the difference between what the government should collect and what it actually does. The commissioner said that every dollar spent on enforcement could result in up to $20 in additional tax revenue. The latest budget proposal from President Trump asks for a $239 million cut to the agency.
Funding for the agency has been cut from $14 trillion to just under $11 billion in the past several years, and it has seen staff levels drop from about 95,000 to about 80,000 thanks to the cuts. One of the benefits of increasing staff levels at the IRS would be a greater ability to help people file their tax returns. The thought is that it may increase trust in the agency and lead to greater levels of voluntary compliance with tax laws.
Those who owe back taxes could see their assets seized or wages garnished. They may also be charged with a crime depending on how much is owed and how much of an effort a taxpayer has made to pay that amount. An attorney can represent an individual during negotiations with the IRS for an offer in compromise or similar relief.