Despite high returns, GOP looks to cut IRS budget
WASHINGTON - Every dollar the IRS spends on audits, liens, and seizing property from tax cheats brings in more than $10, a rate of return so good the Obama administration wants to boost the agency's budget.
WASHINGTON - Every dollar the IRS spends on audits, liens, and seizing property from tax cheats brings in more than $10, a rate of return so good the Obama administration wants to boost the agency's budget.
House Republicans, seeing the heavy hand of a too-big government, beg to differ. They have voted to cut the IRS budget by $600 million this year and more in 2012.
The IRS has dramatically increased its pursuit of tax cheats in the last decade: Audits are up, property liens are up, and asset seizures are way up. President Obama and Democrats in Congress see stepped-up enforcement as a means to narrow the nation's budget deficit without raising tax rates or cutting popular spending programs.
"It makes little sense to cut the agency that collects revenue," said Rep. Jose Serrano of New York, the top Democrat on the House subcommittee that oversees the IRS budget.
IRS Commissioner Doug Shulman told the committee Tuesday that the Republicans' proposed $600 million cut in this year's budget would result in the IRS' collecting $4 billion less through tax-enforcement programs.
The Senate, controlled by Democrats, is unlikely to approve that large a cut. But given the political climate on Capitol Hill, Obama's plan to increase IRS spending is unlikely to pass, either.
Obama has increased the IRS budget by 10 percent since he took office in 2009, to nearly $12.5 billion. The president's budget proposal for 2012 would increase IRS spending by an additional 9 percent - adding 5,100 employees.
Republicans view the IRS as an ideal target in their promise to reduce government spending, in part because the agency will play a big role in implementing Obama's new health-care law.
If the law survives court challenges, the IRS would administer tax credits for businesses that provide health insurance to employees, as well as credits to help individuals pay for coverage. The agency also is tasked with enforcing the mandate that most Americans buy health insurance, starting in 2014.