The study says the biggest impact comes in the enforcement budget. The IRS recently wrote Congress that reductions in that area will "negatively affect the level of tax collections by as much as seven times the amount of the budget cuts." The reductions come despite significant increases in IRS responsibilities, such as administration the Affordable Care Act and Foreign Account Tax Compliance Act.
In its summary, the IRSAC termed the overall situation "an existential funding crisis."
The lack of funding, coupled with unpaid furloughs, has resulted in small or no pay raises for personnel, and that has triggered the retirement of many senior personnel while preventing vacancies from being filled. The training budget has been reduced by 85 percent since 2009, although the report said some funds had been restored in that area.
The request for laws that enable the IRS to regulate preparers came in the face of court action that threw out a program initiated by the agency and it cited a study of returns filed for tax years 2006 through 2009.
"Most surprising, even startling, is that tax returns prepared by preparers had a higher estimated percent of errors—60 percent—than self-prepared returns—50 percent," the study concluded.
The study also cited a recent report by the Government Accounting Office that said a visit to 19 preparers, "found that only two calculated the correct tax refund for its sample return. Although this is a small sample, GAO also found that some preparers did not even prepare the correct type of return."Last modified on Thursday, 04 December 2014