IRS Budget Cuts Only Promote Cynicism, Encourage Cheats

US tax form 1040 with pen and calculator.
US tax form 1040 with pen and calculator.

If you live in Dallas and you owe the Internal Revenue Service $900,000 or so, don't worry about it. The IRS is so short-handed down there it doesn't bother with tax scofflaws who owe less than $1 million.

It's more or less the same all over the country. For five consecutive years Congress has taken an axe to the IRS budget imposing total budget cuts thus far of $1.2 billion. As a result, the IRS has lost 13,000 employees, 11 percent of the total. Last year, the IRS began 19 percent fewer criminal investigations than the year before. This year the agency expects to close at least 46,000 fewer audits. With 5,000 fewer revenue agents, revenue officers and criminal investigators, the IRS expects at least $2 billion that taxpayers owe to the government will go uncollected in 2015.

An even bigger deal in terms of the public is its inability to provide guidance to taxpayers. Our tax code is a vast wasteland of overly complicated provisions that Congress is constantly tinkering with -- tens of thousands of pages of tiny type written in an insider language that few mortal humans can comprehend. Most people hire professionals to do their tax returns but not everyone can afford to do that and more than a few sensible people are determined to do their own taxes because it is personal information they prefer to keep to themselves. But because of the draconian staff cutbacks, 60 percent of callers cannot get through to anyone at the IRS to ask questions. If you show up in person at an IRS office, you have to wait for hours and still may not get to the front of the line by closing time.

The people who work for the IRS are having to spend their own money for routine things like pens and copier paper. They are being asked to do an unpopular job with inadequate resources and are routinely abused by taxpayers and politicians. Predictably, many of them are counting the days to retirement and few young people are applying for the jobs being vacated. Overall it is a dismal situation.

The legislators responsible for this absurd situation are doing a great disservice to our country. With one hand they enact laws and policies that require our government to spend more money than it has, and with the other they make it impossible for our government to collect the funds that are owed by taxpayers.

On a more fundamental level, this abdication of responsibility cannot help but promote cynicism among taxpayers who want to do the right thing, yet find the tax code indecipherable and know big time tax cheats are getting off scot free. At the end of the day, our tax system, like all of our legal system, depends on voluntary compliance by honest citizens. Congress is undermining that trust, shortchanging the treasury and encouraging illegal behavior. This is a serious mistake.

Jerry Jasinowski, an economist and author, served as President of the National Association of Manufacturers for 14 years and later The Manufacturing Institute.