The IRS’ understaffing challenges may only intensify throughout the coming years.
The tax agency says 27 percent of its workforce will be eligible to retire at the end of the year, while it has had a difficult time recruiting younger employees to take their places. Less than 0.5 percent of its staff consists of workers under the age of 26.
Meanwhile, the IRS lost about 18,000 full-time positions between 2010 and the start of 2018. In 2017 alone, 6,801 permanent jobs were lost.
While headcount is diminishing, so too is funding. Between fiscal 2010 and 2017, the agency’s funding levels declined by about 20 percent. In 2018 the agency’s budget saw a slight uptick, including $320 million to implement Republicans’ sweeping overhaul of the U.S. tax code.
Final 2019 funding levels are pending.
At a time when the IRS faces the challenge of carrying out the Tax Cuts and Jobs Act, the cuts have presented a host of challenges.
The number of auditors has dropped about 30 percent since 2010 –falling under 10,000 for the first time since 1953 last year – to 9,510, according to ProPublica.
As a result, taxpayers are less likely to be audited. Last year, the IRS screened just 0.62 percent of individual returns. It was the sixth consecutive year of decline. Of high-income households, which are expected to be audited at a higher rate, just 4.37 percent of returns were reviewed, while the rate for taxpayers with incomes below $200,000 was 0.59 percent. Business audits also dropped.
The agency also has fewer resources to go after negligent taxpayers.
The number of nonfilers pursued dropped to 362,000 last year, from 2.4 million in 2011, ProPublica reported.
Meanwhile, cases brought by the agency’s criminal division – where staff levels have fallen by one-fifth – are down nearly 25 percent since 2010, according to The New York Times, to 795 last year.
Experts have told FOX Business that at some point, a lack of enforcement is going to affect the probability of noncompliance.
The agency has estimated that it has lost hundreds of billions of dollars in unpaid taxes from business owners alone.
The Tea Party targeting scandal, which drew widespread public attention in 2013 when IRS official Lois Lerner admitted the agency was dissecting conservative groups’ applications for nonprofit status with greater scrutiny, has colored certain perceptions on Capitol Hill. Some Republicans, roiled by the incident, formed a prickly relationship with the agency, which some believe has not helped the funding situation.
President Trump nominated California tax attorney Charles Rettig to succeed Josh Koskinen as IRS commissioner earlier this year. He was sworn in a few months ago.