The “TIGTA” or Treasury Inspector General for Tax Administration released on October 1, 2014 his Annual Report of IRS Compliance Trends, commenting that “Despite less funding and fewer employees, the Internal Revenue Service (IRS) increased the total dollars received and collected for the third straight year.”
However, the IRS conducted fewer examinations, and its Collection Function continued to receive more delinquent accounts than it closed. Budget reductions contributed to a decrease in the number of examinations and an increase in the number of delinquent taxes being placed in “inactive status,” according to J. Russell George, who currently holds the office of TIGTA. (We wrote about the role of TIGTA in an earlier Pottscast, Who Audits the IRS.)
The IRS collected 13% more in fiscal year 2013 than in the previous fiscal year, bringing in a staggering $2.9 trillion (that’s $2,900,000,000,000 – I think!). As late Senator Everett Dirksen (R-Ill) is rumored to have quipped: “a billion here—a billion there—and pretty soon you’re talking real money.” Now the Senator might be tempted to update his joke.
“Enforcement revenue” (which is revenue collected as a result of IRS intervention—such as auditing tax returns) increased from $50.2 billion to $53.3 billion in the last fiscal year.
All of this money taken from the people and given to the government was accomplished by the IRS with a budget in fiscal 2013 which was 7.4% less than in the prior year. They spent only $11.2 billion, cut the number of full-time equivalents by 9% (to 86,310 at the end of fiscal 2013).
This is indeed a great trust to place in an agency of government. Ours is a self-assessing system with the IRS monitoring compliance. Its tactics can be irritating, its decisions and interpretations sometimes wrong, and even on rare occasion, the freedom of certain citizens can be threatened. But on the whole, one cannot argue much from a management standpoint about its efficiency.
Please keep in mind is that as professional tax accountants we are here to protect your interests, and while we abide entirely in accordance with the law, we do not work for the IRS. Should you fall into that number who are contacted about an audit (either in person or by correspondence) we want to know about it. In fact, let us see everything you get from the IRS as soon as you get it. Don’t go it alone: you won’t regret it.