Dusty, That’s Clearly Your Underfunded, Understaffed IRS

South Dakota’s lone Congressman, Dusty Johnson, is complaining that the Internal Revenue Service isn’t getting its work done:

Dusty, you don’t need to write a letter; just look in the mirror at your own votes and your Republican Party’s efforts to deny the IRS the resources it needs to process refunds, collect taxes, catch tax cheats, and help taxpayers:

Johnson’s staff issued a statement from Washington, D.C., late on Thursday, Nov. 18, to say he’d oppose President Biden’s social spending bill, a $1.75 trillion piece of legislation that could also add $367 billion to the federal deficit over a decade , according to a congressional budget review.

“This massive spending package undermines work, further strains Medicare, and according to the CBO, isn’t paid for,” Republican Johnson said in a statement. “I will be voting no.”

…Furthermore, Johnson pointed out the bill would also spend $80 billion for IRS enforcement and expand subsidies for the Affordable Care Act and Medicare, which he says are already at risk of “insolvency” [“South Dakota’s Dusty Johnson Votes ‘No’ to Build Back Better Legislation,” Mitchell Republic, 2021.11.19].

…and…

Under pressure from well-heeled conservative advocacy organizations and donors, Republican senators have removed funding for IRS enforcement from an emerging bipartisan infrastructure plan, threatening to tank a proposed crackdown on rich tax cheats.

…The scrapped provision would have increased the IRS budget—a frequent target of GOP cuts in recent years—by $40 billion over the next decade to help the agency combat tax dodging, which is depriving the federal government of trillions of dollars in revenue. An analysis released earlier this year by academics and IRS researchers estimated that 36% of unpaid federal income taxes are owed by the top 1%.

Due to persistent funding shortages and inadequate staffing, the IRS now audits poor Americans at roughly the same rate as the wealthy, who often use complex strategies to avoid paying taxes. Big businesses are also taking advantage of the depleted IRS; the agency now audits just half of all large company tax returns, allowing corporations to claim unwarranted tax breaks [Jake Johnson, “Republicans Renege on Deal with Democrats, Strip Funding for IRS in Gift to Rich Tax Cheats,” Salon, 2021.07.19].

…and since before Dusty’s time in Washington…

The IRS has been targeted for sharp funding cuts since 2010.  Its current budget of $11.2 billion is 18 percent below the 2010 level, after adjusting for inflation.^[5]  As most IRS funding goes to staffing, the cuts have forced the IRS to dramatically reduce its workforce; the agency lost roughly 13,000 employees — around 14 percent of its workforce — between 2010 and 2016.^[6]

These damaging cuts have weakened the agency’s ability to perform its core functions of collecting taxes and enforcing the nation’s tax laws.  As seven former IRS commissioners from both Republican and Democratic administrations have written: “Over the last fifty years, none of us has ever witnessed anything like what has happened to the IRS appropriations over the last five years and the impact these appropriations reductions are having on our tax system.”^[7]

Cuts in staff and other resources have affected taxpayer services, cybersecurity, and enforcement.^[8]  Taxpayer services have remained at subpar levels across this period, despite an improvement in 2016 after Congress modestly boosted taxpayer services funding.  Even with this improvement, only 53 percent of calls from taxpayers were answered in fiscal year 2016 (down from 74 percent in 2010) and callers waited almost 18 minutes on average for an answer (up from 11 minutes in 2010).^[9]  Funding cuts have also caused the IRS to delay much-needed upgrades to its information technology systems, compromising the security of taxpayer data and weakening its ability to identify and assist victims of identity theft.  As IRS Commissioner John Koskinen stated, “We’re falling behind in upgrading hardware infrastructure and software.  This compromises the stability and reliability of our information systems, and leaves us open to more system failures and potential security breaches”^[10] [Brandon Debot, Emily Horton, and Chuck Marr, “Trump Budget Continues Multi-Year Assault on IRS Funding Despite Mnuchin’s Call for More Resources,” Center on Budget and Policy Priorities, 2017.03.16].

…and…

The IRS is in big trouble. It has a historic backlog of unprocessed tax returns and the thinnest workforce the agency has had in decades.

House Republicans have been hitting the IRS with a steady wave of funding cuts since at least 2011, in response to signals that then-President Barack Obama intended to increase the agency’s funding. Since then, the cuts haven’t stopped, and Democrats aren’t happy.

On Thursday, Ron Wyden, Democratic senator from Oregon who currently chairs the Senate Finance Committee, chided Republicans for the depleted state of the IRS, suggesting that the party is to blame for millions of unprocessed tax returns this year. It is unclear if Wyden was responding to any new measure from Republican lawmakers with regards to IRS funding.

“Republicans are the guy in the hot dog suit, swearing up and down that they are trying to find the guy who did this,” Wyden said during a Senate floor speech, referencing a comedy sketch from the Netflix show “I Think You Should Leave,” that has since become an internet meme.

In the sketch, a car shaped like a hot dog crashes into a store, and a man dressed as a hot dog does his best to distract a gathering crowd and deflect responsibility for the crash, before making a run for it when policemen try to apprehend him [Tristan Bove, “Republicans on IRS Funding Are ‘Like the Guy in the Hot Dog Suit,’ Top Democrat Says, Likening Their Complicity in Gutting the Agency to a Viral Netflix Comedy Sketch,” Fortune, 2022.05.20].

Dusty is mad that the IRS isn’t processing tax returns fast enough. But that’s what happens when you, Dusty, you and your Republican Party, defund the tax police.