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IRS Sees Further Fall In Enforcement Revenue

by Mike Godfrey, Tax-News.com, Washington

According to a report released by the Treasury Inspector General for Tax Administration (TIGTA), Russell J. George, enforcement revenue collected by the United States Internal Revenue Service (IRS) has declined for the second straight year.

TIGTA’s report, which provides information about how the IRS focuses its compliance resources and the impact of those resources on revenue and compliance over time, showed that enforcement revenue collected declined by 9 percent in Fiscal Year 2012, from USD55.2bn to USD50.2bn.

This has decreased in two successive years and is 13 percent less than the USD57.6bn collected in Fiscal Year 2010. TIGTA added that the 13 percent reduction in enforcement revenue correlates to the 14 percent reduction in the number of enforcement personnel in the IRS.

“The IRS is facing many new challenges while operating with fewer resources and employees,” said Mr George, “Several indicators showed the effect of this, including a decrease in enforcement revenue and a continued increase in accounts receivable.”

TIGTA conducted the review in response to continuing stakeholder interest in the analysis and trending of Collection and Examination function activities. It was found that, during Fiscal Years 2011 and 2012, the IRS encountered challenges that included administering recent legislative changes within an environment of decreasing resources.

For example, it noted that approximately 50 of the 500 Affordable Care Act provisions add to or amend the Internal Revenue Code. At the same time, the IRS operated under a continuing resolution for Fiscal Year 2012 that funded it at a little more than USD11.8bn, which is a 2.7 percent reduction since Fiscal Year 2010.

In addition, TIGTA disclosed that the IRS continues to receive more new taxpayer delinquent accounts than it closes. The amount owed in the Queue (unassigned inventory) increased 22 percent in Fiscal Year 2011 (USD56.2bn) and 12 percent in Fiscal Year 2012 (USD63.1bn), and has grown 46 percent over the past five years.

It also found that the Examination function’s recent decrease in revenue agents and tax compliance officers contributed to an overall decrease in examinations of individual tax returns.

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January 8, 2016

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