IRS Spending Versus Revenue

Photograph by Andrew Harrer/Bloomberg

The Internal Revenue Service (IRS) building in Washington, D.C.

The Internal Revenue Service warns that budget cuts would impair its ability to enforce the tax code and prevent cheating.

The top House Republican overseeing the agency’s budget disagrees.

Rep. Ander Crenshaw of Florida told reporters today that he doesn’t think there’s a direct relationship between the agency’s funding and its collections.

“People always say if you give the IRS more money, then they’ll collect more revenue,” he said. “I think people have observed this year that they’ve collected more revenue than ever in the history of the IRS and it wasn’t based on spending more money on the IRS.”

Total government revenue has gone up because of a combination of population growth, economic growth and tax increases.

Almost all of the $2.8 trillion in tax revenue collected in fiscal 2013 comes from people and businesses who comply with the laws and file returns on time.

IRS statistics released last week showed revenue from tax enforcement declining. In fiscal 2013, the IRS collected $9.83 through audits, the first time that figure had been less than $10 billion since at least 2003.

The spending bill being considered by Congress this week would give the tax agency about $11.2 billion for the fiscal year ending Sept. 30, about the same as it spent last year. That’s more than the $9 billion that Crenshaw proposed and less than the $12.8 billion sought by President Barack Obama.

 

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