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Federal income tax.

Tax Facts Q: 7501-Q: 7563

>> News Release IR 2011-71

Nina Olson, the National Taxpayer Advocate, recently released a report to Congress that identifies the priority issues that the Taxpayer Advocate Service (TAS) will address during the coming fiscal year. The report expresses particular concern about the impact of IRS budget cuts on taxpayer service and tax compliance.

The report notes that the last few years have been particularly challenging for the IRS. Specifically, the TAS notes that the IRS's ability to respond to taxpayer phone calls and correspondence has declined. Comparing FY 2010 with FY 2004, the percentage of phone calls that the IRS answered from taxpayers seeking to reach a telephone assistor declined from 87 percent to 74 percent, and the percentage of unanswered correspondence classified as "overage" at year's end increased by 135 percent.

Interestingly, the National Taxpayer Advocate has previously suggested that the IRS generally be exempt from budget caps or reductions. She has noted that the "tax gap" (i.e., the amount of tax due but not paid voluntarily and timely) is estimated to be about $345 billion a year. "As the de facto 'Accounts Receivable Department' of the federal government, the IRS collects well over 90 percent of all federal revenue," the report notes. On a budget of about $12.1 billion, the IRS collected $2.35 trillion in FY 2010, or about $194 in federal revenue for each dollar it spent.

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Title Annotation:Monthly Round-up
Publication:Tax Facts Intelligence
Date:Aug 1, 2011
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