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Internal Revenue Service funding cuts have cost the country between $58 billion and $84 million less tax revenue. That is an estimate from Internal Revenue Service Advisory Council, which issued its annual report for 2018 this week.

“The draconian cuts to the IRS budget have meant less of everything, from personnel to training to taxpayer assistance to enforcement activities to compliance to systems modernization and, ultimately, to tax revenue,” the committee said in the report

IRSAC based its estimates on statistics that the IRS returns four dollars to the federal government for every dollar it receives and at least six dollars for every dollar spent on enforcement activities.

The committee based its estimate on the accumulative reduction in funding of $14.5 billion from 2010 through to 2018. IRSAC said 40 percent of the IRS went to enforcement and 60 percent towardstaxpayer services and operations support.

IRSAC used those statistics and the ratios to calculate the loss.

Because of lost funding, the IRS now has almost 24,000 fewer full-time employees than in 2010, a nearly 25-percent decline. More than 17,000 worked in enforcement. One result has been the number of audits has fallen by almost a half. Investigations have dropped from 4,706 to 3,019 over the period. During the same time the number of prosecutions dropped from 3,034 to 2,251 while indictments and informations dropped from 2,645 to 2,294.

Bob Scott
Bob Scott has provided information to the tax and accounting community since 1991, first as technology editor of Accounting Today, and from 1997 through 2009 as editor of its sister publication, Accounting Technology. He is known throughout the industry for his depth of knowledge and for his high journalistic standards.  Scott has made frequent appearances as a speaker, moderator and panelist and events serving tax and accounting professionals. He  has a strong background in computer journalism as an editor with two former trade publications, Computer+Software News and MIS Week and spent several years with weekly and daily newspapers in Morris County New Jersey prior to that.  A graduate of Indiana University with a degree in journalism, Bob is a native of Madison, Ind
Last modified on Monday, 19 November 2018
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