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Many taxpayers starting to feel the impact of IRS budget cuts

We've naturally been paying close attention to the story of how federal budget cuts will affect the IRS. When we last wrote about it, on March 4, the word was that the IRS intended to delay furloughs of employees until after the April 15 income tax filing deadline. Furloughs are essentially mandatory, unpaid vacation days that are used to implement cuts in agency budgets.

In California and across the nation, taxpayers should be aware of these furloughs and other staff budget cuts because they affect the ability of the IRS to monitor compliance with tax law requirements. Budget cuts also affect the level of customer service provided by the IRS, such as telephone assistance to taxpayers.

April 15 is still a few days away. But it has become clear that lack of staff power is starting to take a toll on the IRS in several ways. It isn't only longer hold times on IRS telephone help lines that are occurring. There are also long lines at the 389 sites around the U.S. that offer in-person assistance with forms and questions. This assistance often includes free tax preparation assistance for the poor and elderly.

Delayed processing of tax refunds, particularly for the victims of identity theft, is another concern.

Furloughs affect only existing staff. But IRS staffing levels are also shrinking due to a hiring freeze. If an IRS employee retires or leaves for another job, that person's workload gets redistributed to others. And that often means the work doesn't get done as quickly as it used to.

The reduction in the number of IRS employees in the last two years is striking. In round numbers, the IRS is down about 10,000 employees due to attrition. That is more than 9 percent of its work force.

To be sure, the IRS is still offering customer service. And it is still conducting audits and investigations. Like other federal agencies, however, the IRS is making a painful adjustment to a new reality of reduced resources.

Source: "Budget cuts cause long wait times on IRS help line," CNN Money, Jennifer Liberto, 4-9-13

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