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The IRS has been lacking sufficient funding for years, which has impacted many of its services. The agency is understaffed and is forced to do with archaic equipment. The IRS has repeatedly quoted lack of funding for its failure to provide proper and timely support to American taxpayers. 

In order to modernize the equipment used by the agency staff and improve its services across the board, IRS commissioner is seeking additional funding of $290 million this year and $2.3 – $2.7 billion over the next 6 years. FCW dives into the details: 

According to the agency’s fiscal year 2020 budget request, funding would go toward simplifying taxpayer interactions across the board, stabilizing operations and maintenance costs for legacy systems, enabling real-time processing and transparency of tax returns, standing up new identity and access management technologies and boosting the use of data analytics to yield operational efficiencies and proactively mitigate emerging IT security threats. 

Commissioner Charles Rettig told the Senate Finance Committee that the certainty and stability of having multiple years of funding mapped out will help improve the agency’s execution of modernization initiatives over the next six years. He said it would also help the agency better absorb and adapt to laws passed by Congress, like the Affordable Care Act and the 2017 tax reform bill, that require significant tax and IT changes. 

Using the extra funding, the IRS will also look to strengthen the security of its systems, which are routinely attacked by hackers. The IRS faces approximately 1.2 billion attacks every year. The agency wants to implement its Data Encryption at Rest initiative, and also provide the Departments of Treasury and Homeland Security with the ability to monitor IRS networks and fund insider threat programs. 

Another consequence of lack of funding is that taxpayers are suffering from poor services from the agency. FCW shares: 

Several lawmakers complained that IRS taxpayer assistance centers in their state had seen significantly reduced staff. Rettig acknowledged the shortages, attributing them to strains caused by an aging workforce and noting that 45% to 55% of IRS employees are eligible for retirement in the next two years. Meanwhile, federal hiring freezes since 2010 have deprived the agency of ‘an entire generation of new blood needed to replace those impending departures. 

The result: Instead of spending years training newer staff on how to read and sift through the ancient code that still powers tax processing systems, those older employees will most likely take a significant chunk of the agency’s institutional IT knowledge with them when they do leave. 

In written testimony to the House and Senate, Tony Reardon, president of The National Treasury Employees Union, said both the proposed cuts for 2020 and chronic underfunding over the past decade have hollowed out the IRS’ enforcement activities, a charge that has been largely backed up by the GAO and media reports. 

He decried a number of proposed cuts to IRS workforce priorities, including an 8% cut to taxpayer support service staff, a $90 million dollar cut to taxpayer and call center services and a $154 million reduction for enforcement activities. 

Rettig said the agency was in the midst of hiring more than 4,300 new employees for compliance and enforcement, but it’s not clear how many of those hires would augment the agency’s human capital as opposed to simply replacing outgoing and retiring feds. 

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