By 2017, according to internal IRS collection reports, that figure had risen to $8.3 billion, 17 times as much as in 2010.
In 2010, $482 million in tax debts lapsed. Such expirations were relatively infrequent before the budget cuts began. Tax obligations expire after 10 years if the IRS doesn’t pursue them. Meanwhile, collections from people who do file but don’t pay have plummeted. According to the inspector general for the IRS, the reduction results in at least $3 billion in lost revenue each year.
New investigations of “nonfilers,” as they’re called, dropped from 2.4 million in 2011 to 362,000 last year. It has drastically pulled back from pursuing people who don’t bother filing their tax returns. Without enough staff, the IRS has slashed even basic functions. But even those stark numbers don’t tell the whole story, say current and former IRS employees: Auditors are stretched thin, and they’re often forced to limit their investigations and move on to the next audit as quickly as they can. The IRS conducted 675,000 fewer audits in 2017 than it did in 2010, a drop in the audit rate of 42 percent. “I blame the Congress for not giving us the budget to do the job.” The IRS Budget Has DeclinedĮmail address This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply. He retired in 2013 at 68.Īfter Pfeil left, he heard that his program was being shut down. After 43 years with the agency, Pfeil - who had hoped to reach his 50th anniversary - was angry about the “steady decrease in budget and resources” the agency had seen. It was an example of how the tax-collecting agency is supposed to work.īut then Congress began regularly reducing the IRS budget.
Ultimately, he figures he brought in more than $50 million in previously unpaid taxes over the course of about five years. Pfeil and the IRS started pursuing the non-U.S. But the vast majority of the foreign companies weren’t paying anything, and taxpaying American companies were upset, arguing that it unfairly allowed the foreign rivals to underbid for contracts. law, companies that do business in the Gulf of Mexico owe the American government a piece of what they make drilling for oil there or helping those that do. taxes, and his employer, the Internal Revenue Service, had no idea. In the summer of 2008, William Pfeil made a startling discovery: Hundreds of foreign companies that operated in the U.S. After Budget Cuts, the IRS’ Work Against Tax Cheats Is Facing “Collapse”Īudits and criminal referrals are down sharply since Congress cut the tax agency’s budget and management changed priorities.
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