IRS Eliminated 5,000 Jobs in Past Year Amid Budget Cuts

The Internal Revenue Service has 5,000 fewer employees this tax filing season compared with 2011.

The IRS accelerated workers’ retirements through attrition and incentives, IRS Commissioner Douglas Shulman told a U.S. House committee today. About 3,000 of the employees worked in tax enforcement, he said. In fiscal year 2010, the agency’s workforce averaged 94,711 people.

Shulman said he worries that federal budget cuts could start to erode tax enforcement and voluntary compliance.

“People start wondering: Am I really going to get caught?” he said, noting that only about 1 percent of tax returns are audited. “There’s some people who will play the audit lottery.”

The IRS is seeking $12.8 billion for its budget for the fiscal year that begins Oct. 1. That’s an 8 percent increase from this year’s budget.

Representative Jo Ann Emerson, chairwoman of the subcommittee that oversees IRS funding, said she has tried to keep the agency from experiencing more severe cuts. Emerson, a Missouri Republican, said federal budget pressure may make that goal difficult to achieve.

Representative Jose Serrano of New York, the top Democrat on the subcommittee, said the government should restore funding to the agency.

“When you cut IRS for short-term political gain, you do long-term damage,” he said.

To contact the reporter on this story: Richard Rubin in Washington at rrubin12@bloomberg.net

To contact the editor responsible for this story: Jodi Schneider at jschneider50@bloomberg.net

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