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IRS Warns of Downtime Risk As Congress Makes Cuts
dcblogs writes Successive budget cuts by Congress are forcing the Internal Revenue Service to delay system modernization that would improve its ability to prevent fraud. In telling of the problems ahead, IRS Commissioner John Koskinen almost sounded desperate in a recent memo to employees. The IRS is heavily dependent on technology, and the impact of the budget reduction to IT this year was put at $200 million. It will mean delays in replacing "aging IT systems" and "increasing the risk of downtime," Koskinen said. A new system to protect against ID theft will be delayed, and other IT cost-efficiency efforts curbed.The budget cuts have been so deep IRS employees are being warned of a possible shutdown for two days before this fiscal year ends in October. It would be a forced furlough for agency workers. The IRS employed 84,189 last year, down from 86,400 in 2013. When attrition is considered, the IRS says it lost between 16,000 and 17,000 employees since 2010. The agency has also been hit with a hiring freeze, and appears to be hiring very few people in IT compared to other agencies.
If these upgrades are so critical, why did they wait until THIS year, and especially during tax season, to do them? Sounds like PR, like the public park "closings" where they actually increased staff to keep people out.
That this forces simplification of the tax code.
That's horrible! Just horrible. Oh, the humanity!
I wonder if anyone in Congress realizes the IT staff probably includes the IRS in house security team. Cue the IRS suffering a breach at the height of tax season.
"make sure everyone is getting taxed properly - particularly the mega rich."
Who do you think gets in to Congress? The Fox is in the hen house right now and there's a ruckus going on.
~~ Behold the flying cow with a rail gun! ~~
They don't have the manpower for an audit.
This is no more than an agency squeeze play for budget restoration. In other words, bull shit.
Scruting the inscrutable for over 50 years.
The IRS is an unbelievably bloated agency. The FBI, whose jurisdiction is significantly more expansive and demanding, has barely 35,000 employees and a budget that's over $3B less and somehow it gets its work done. A colleague of mine knew some guys who had to work at the IRS as contractors. He said that toward contractors, the IRS is by far the most abusive agency he's ever seen. They routinely expected 60 hour work weeks from the contractors.
Again, I think this is a major reason that the tax code IS NOT simplfied. If it was then there many tax giveaways would simply be gone. How the amount of money that is given away to corporate entities is NOT a scandal is itself a scandal, and it's partially pulled off because the tax laws are so hard to understand without a team of lawyers.
"Burn everything down, because there might be problems in the old implementation, so let's start from scratch." It's fun to think back to the time when /. wasn't filled with paranoiacs, and when working as a team to solve things wasn't seen as socialism.
Yes, I understand that you think taxes are theft. Given that the alternative is either not having civilization or living in a permanent Mexican standoff (which, one could argue, is also not having civilization), it seems like having a functional government would be something to support.
That this forces simplification of the tax code.
Since when does the IRS decide what the Federal Tax laws are?
That is easily the most insightful comment in this discussion so far.
Damn_registrars has no butt-hole. Damn_registrars has no use for a butt-hole.
The "old people" paid their Medicare and Social Security taxes for their entire lives. Plus, for many of them if you do cut Social Security or Medicare, they will be forced to rely upon other social services - food stamps, housing assistance, etc...
So Paul Ryan's plan to cut those programs is both immoral - to take away a program the recipients paid into like a pension fund - and short-sighted, since most of the money saved by cuts will be lost through other state and federal agencies picking up the slack.
Next you'll propose that we just execute everyone over the age of 68. Or maybe everyone over the age of 68 that doesn't have a million dollars of net wealth.
So I take it you never get a raise at your job. Good for you.
Project budget does not could as a real budget.
I am expecting a certain raise but I won't budget that until I see if it materializes.
In other countries, the government collects payroll information and prepares a tax statement for each citizen. People review the tax bill and pay if they owe money. Or they amend any information on income and pay the recalculated payment.
In the US, citizens are made to calculate their tax responsibility, or hire someone to do it. The government then tells them if they have their calculation correct with threat of penalty if done incorrectly.
I only look human.
My mother is a halfling and my dad is an ogre, so that makes me an Ogreling
Instead of systematically targeting conservative groups by sitting on their paperwork, they should burn it for fuel.
"Now, I doubt any of you would prefer a rolled up newspaper as a weapon against a dictator or a criminal intruder."
One suspects that might have been the point.
The IRS already spends $300 million/year (FY2014) on this supposed "modernization," and thats down from previous years ($330 million/year for FY2012 and FY2013) So over the last decade they have blown through billions on "modernization."
With this sort of budget, they could have built several Titan supercomputers per year (in 2012 it was the fastest supercomputer ever built) and still had billions of dollars left over.
The agency actually currently blows through a total of $11.7 billion/year.
It seems to me that they already have an order of magnitude more money than they need and the problem for them is that when push comes to shove their budget could easily be cut in half several times, which if it happened would mean the big-whigs over at the IRS would suddenly lose their power to wastefully spend many billions of dollars per year. Obviously that outcome is frowned upon by those that control that money.
That some people defend this practice with statement like "Given that the alternative is either not having civilization or living in a permanent Mexican standoff " shows that those people really have no idea how much money these government agencies are spending. There is a reason that 4 of the 5 richest counties in the United States surround Washington D.C:
#1 Loudoun County, Virginia. 35 miles from D.C
#2 Howard County, Maryland. 27 miles from D.C
#3 Fairfax County, Virginia. 11 miles from D.C
#4 Hunterdon County, New Jersey. 160 miles from D.C.
#5 Arlington County, Virginia. 5 miles from D.C.
"His name was James Damore."
"Successive budget cuts by Congress are forcing the Internal Revenue Service to delay system modernization that would improve its ability to prevent fraud."
One suspects that might have been the point.
This is crap. They are picking where to spend their money. This just shows that this is less important to the IRS than other areas.
Poor babies, so they'll have to get by with just 12.5 Bn in 2015...your tax dollars at work.
All the more reason to move to a flat tax system.
Yes. It's that simple: Shortsighted moronic stupidity.
But this is the GOP playbook: break things so they don't work, then complain that they don't work, and break them some more.
Case in point: the IRS.
Now nobody particularly likes the taxman.
But the IRS is responsible for funding the rest of government.
So impairing the governments ability to actually pay for the things it does, is stupid.
Specifically, for every dollar spent on the IRS, government takes in 5-7 dollars.
So cutting the IRS, impairing it, preventing it from doing its job, WILL RESULT IN INCREASED DEFICITS.
Customer service wait times, ie help filling out forms, has already more than doubled due to lack of staffing to answer calls. Nearly 40% of
callers give up and hangup before even being helped. There's the issue of tax fraud that they are unable to prevent/investigate because of
lack of staffing, meaning some of the refunds they payout are fraudlent.
And again, there is the simple issue of, if you want government to actually pay for the things it does, someone needs to collect that
money. And making it harder for them to due that, is moronic. Sabotaging and impairing the government's ability to function in order to them
blame them for the dysfunction that you ahve caused is the height of hypocrisy. But again: its the standard GOP playbook.
Mr Bookman says it best:
I suppose they think that’s some kind of revenge for the IRS’ perceived persecution of conservatives, but the agency isn’t some
living, breathing entity that feels pain or retribution. It also won’t affect IRS employees all that much, because they’ll keep coming into work,
doing their job and going home at night, just like before.
However, enforcement will decline, tax cheaters will prosper and even be encouraged, honest taxpayers will get played for suckers,
revenue will fall, the deficit will rise and hundreds of thousands of Americans who call the IRS for information or assistance will be stuck on
the line for an eternity before hanging up, angry at what looks from their end to be an arrogant, unresponsive government that is
supposed to be helping them. Those taxpayers will mutter that no business would ever get away with treating its customers that way. They
will be right.
That’s because no business is run by people whose goal is to make customers hate that business. It’s dumb and it’s destructive, but
that’s what happens when we are governed by children.
So next time you complain about government spending money it doesn't have, remember that it was you that did it to yourself.
--
How Stupid Sequester Cuts To The IRS Could Result In A Bigger Deficit
http://thinkprogress.org/econo...
The IRS estimates that every dollar spent on enforcement brings in $4-$5 dollars of additional revenue. As Reuters’ David Cay
Johnston found, every hour spent on corporate tax enforcement bring in more than $9,000 in revenue.
GOP’s childish attack on IRS will hurt honest taxpayers
http://jaybookman.blog.ajc.com...
The IRS Oversight Board, a citizen panel created by a Republican Congress in 1998 to help “rein in” the agency, is even more
blunt about the impact of cuts imposed since 2010. IRS staffing is down 26 percent from two decades ago, and some 5,000 enforcement
agents have disappeared from its payroll just since 2010. That’s pretty dumb, since every dollar spent on enforcement is estimated to
produce $7 in additional revenue to help cut the deficit.
The board notes that account
The guy who said the election was rigged won the presidency with the second-most votes.
The IRS suffering a temporary shutdown would be cause for celebration.
I'm not talking about libertarian utopias here at all. Rather, I'm saying a failure of that magnitude (a government incapable of even keeping its agency going which collects its FUNDS) would be a huge wake-up call that the current system is broken.
Discussions that might come from such a shutdown would include, "Maybe it's about time we simplify the tax code, so all of this infrastructure isn't necessary to collect taxes?"
Why is the tax code so convoluted that there is an entire industry devoted to following the code? It's because Congress keeps piling on the laws, exceptions, work-around, and "social engineering". Instead of adding law to the US Code, they should be removing pages from the US Code. To make things simpler, start eliminating "targeted" deductions and exemptions/exceptions to deductions, so that individuals and married people can play by the same rules as the businesses, companies, and corporations. If insurance premiums are tax-deductible to one class of taxpayer, it should be the same for all classes of taxpayers.
Completely remove the "negative tax liability". If you are going to give people money, give people money directly, and not via the IRS. The IRS is not a social agency. Their job is to collect taxes. I'm not sure what to do with tax-exempt organizations in the current climate, but the IRS shouldn't be making that determination off their own bat. They should stick to the "revenue" part.
The IRS regulations published in the Code of Federal Regulations (CFR) are to implement the statues passed by Congress. The IRS does not do this off their own bat. Court cases balloons the number of pages of interpretation, because there is no requirement to "backfill" the CFR or the USC, and stare decisis increases the amount of law surrounding tax -- another source of law bloat. That's why WestLaw and Lexus/Nexus is so necessary, and why tax attorneys demand -- and get -- such high fees. Those fees can be chickenfeed compared with the interest and penalties that their clients have to pay out when they don't use an attorney.
I don't have an opinion of the Fair Tax proposal, because I'm not sure I understand it yet. But I do know that there are way too many densely-printed pages in USC Title 26. Shrink that down to something the size of a magazine, and many of the tax ills will be solved. Ordinary people will be able to understand the law they are supposed to follow.
As a consequence, the IRS itself would shrink. And the new IT systems would be far easier and quicker to implement.
(pipe dream, for sure)
Reason being the tax code is so complex that to code that takes an enormous effort.
By his example, he got a $10 raise.
Unless you are using Common Core math I guess.
When Fascism comes to America, it will call itself Anti-Fascism, and tell you to give up your guns.
WE DON'T HAVE ENOUGH MONEY TO PAY FOR EVERYTHING WE WANT.
I know this is a crazy idea, but maybe we could have a serious discussion about what our government spends its money on, instead of just continuing to write checks for every bloody social program or war we feel like funding, and then kicking the can to future congresses by coming up with a "sequester" that takes a flat cut of every budget.
I mean, yes, at least taking a TINY bit from each budget is better than never cutting spending at all, but that result is what you get when the room is filled with incompetents too stupid to compromise/prioritize in any way.
Two points:
1) the fact that we're the wealthiest nation with the highest standard of living ever in human history, and are having this discussion is pretty pathetic.
2) Congress is largely to blame, but POTUS gets much of this as the nation looks to him for leadership, yet he cheerfully - like everyone else in Washington, largely in both parties - as if the money will never really run out. Every SOTU speech is filled with new programs he wants to enact, and new things to spend $ on. To repeat:
WE DON'T HAVE ENOUGH MONEY TO PAY FOR EVERYTHING WE WANT.
I know, I don't belong in politics. Clearly, I'm irrational by Washington standards.
-Styopa
IRS's footprint within the US Department of the Treasury http://en.wikipedia.org/wiki/U...
You can't get rid of frauds as long as the IRS is involved. An organization with a license to steal should be talking about others' fraud.
If you knew anything about gov't contracting, you'd know that they're salaried to the company and billed hourly to the government. This is why unpaid overtime is such a sensitive topic with government contractors. It is literally the company stealing the employee's job security. Let's say you have been budgeted 640 hours. That's 4 months of 40 hours a week. Doing 20 hours of unpaid overtime a week for a gov't contractor means you are going to be at risk of being laid off in about 11 weeks as opposed to 16 weeks.
I did misread your mention of Paul Ryan, and I grant that it does take courage to address the issue.
I have more socialist leanings, or at least a desire for a much stronger social safety net at all levels and what I believe to be the moral justification for it and for raising taxes on the wealthy to support it too.
You want to tax 99% for income over 2million? Why 2 million? How is that fair (ya know, equal protection and all)? SHouldn't everyone have the same tax rate? Estates over 10million? My parents own several thousand acres on a working farm. If they leave it to me, I have to sell land or mortgage the house to satisfy the taxes? So my farm gets parted out and smaller? How's that good for my future income and the future taxes I'll pay on that income? Why 10 million? So you most people won't get affected by it and thus vote for it? How's this.... we all vote that you gotta buy us lunch. In a democracy, the mob rules. The trick to getting the voters to go for something is to make sure that less than 1/2 of the voters are affected by said law. SMH.
At this rate, I expected I would make a million dollars this year, but I only made $50k, so I experienced a $950,000 loss. I also didn't get to sleep with that hottie in HR, but that's an intangible loss.
Since when does the IRS decide what the Federal Tax laws are?
Since forever within limits. The IRS gets to interpret the law like any executive branch agency and issue regulations and delegated legislation. Legislatures issue statutes and those statutes are further interpreted with regulations by executive agencies and in case law by the judicial branch. ALL government agencies regardless of branch get a say in what the laws are and yes the IRS decides what significant portions of the tax law will be. The legislature or judiciary may override an IRS regulation if they choose but the IRS definitely gets a big say in deciding what the tax laws are.
So you're saying that the IRS unilaterally went out and made changes to the tax law without direction from POTUS or Congress?
EVERY government agency does this. Neither Congress nor POTUS would ever get anything done if they had to approve every action of every government agency. Congress and POTUS and the judiciary set the framework but the agencies generally see to the fine details and have significant leeway in deciding how to best carry out those regulations.
Here's how it works. Legislatures write statutes which usually outline what is to be done but often leaves the finer details up to the agencies tasked with carrying out the statute. Agencies interpret these statutes with regulations which are another form of law making. The president can order an agency to do something with an executive order to direct agencies but once again unless the president is very specific the details are left to the agency so long as they remain within the bounds of the executive order. The judiciary also interprets statutes and regulations with case law which is yet another form of law making and case law sometimes overrides regulations and less frequently overrides statutes. The judiciary and legislature can override a regulation if they choose but every branch of government plays a role in writing laws.
Implying that four of the five richest counties in the US is due to the spending by the IRS is just BS.
yes, it would be. Good thing that nobody did it. Do you always stretch so far in order to save your fantasy from reality?
"His name was James Damore."
...and the other half would be in jail.
Time to offend someone
If I remember correctly the cuts that were proposed weren't what normal people consider cuts, but were decreases in the rate of increase which in Washington D.C. translates to someone took a chainsaw it. Then I could be remembering it incorrectly but that was a while ago.
The problem is that structurally Social Security and Medicare have problems. Depending on what side of the aisle you are on it is either they have been too generous with benefits or haven't been funded like they needed to be. Either way it is going to be a political mess when the trust fund runs out, but even before that things are going to get painful for the government.
In years when Social Security was running surpluses that extra money went to purchase the bonds for the trust fund so that money went into the general fund to pay for other stuff. Since the trust fund is really just government bonds that will get redeemed from the general fund you are going to see either increased taxation, decreased spending on other programs, or more likely higher deficit spending. When that is gone then the hard decision comes as Social security will only be able to pay out ~75% of the benefits it had been paying out. The government doesn't have a choice in this because the constitution states, in not so few words, that the debts will be paid. At this point the US federal government will either have to directly fund the difference out of the general fund (basically it will be the same amount that was spend on the previous month paying off the last batch of redeemed bonds), or tell the peasants to piss off and accept that they can't pay benefits in full.
Time to offend someone
It's not a religion. It's a considered set of ideas - and considering the common comments on Slashdot, I think assuming the person writing something is a radical conservative is a safe bet. This is the first time in a long time I made that bet and was mistaken.
A religion is blind to logic. I'm an atheist, and in terms of 'political religions' I am open to logical discussion on both sides. But libertarianism, which Rand Paul supports a flavor of, isn't logical.
The problem is the way Social Security was handled. I'm getting close to retirement, meaning that I started paying into the system over forty years ago, and let's not forget about the portion that comes out of what my employer allocates for payroll expense that doesn't show up on my paycheck. I've been paying into the system, regardless of whether I was tight for money or very comfortable, regardless of whether I could do better investing the money by myself. Moreover, Social Security itself is, on paper, properly funded for decades to come, and that's with a fairly conservative investment rate. This is why I feel very sensitive about my upcoming Social Security benefits. I paid for them, and there's no inherent reason I shouldn't get them.
Now, the government passed a law that says that Social Security funds will be invested in US government bonds. This not only means I could have done considerably better investing the funds myself, but that the surplus was used to run the daily US government expenses. There are now a lot of people who are saying that the Federal government doesn't want to pay its debts, because that would mess up the budget, and so that Social Security outgo should be reduced to its current income. I'm against these people.
There's also people who are saying that Social Security isn't quite actuarily sound, and that we have to make adjustments, and I'm a lot happier with those people. The problem I have with those proposals is that I fear they'll get swept into proposals to stiff people in my age group because we're now inconvenient.
I do have other resources for retirement, including various savings and investments, and an actual defined-benefit pension (not big but it'll be nice to have). Lots of people in my age group are much worse off.
"When you have eliminated the unacceptable, whatever is left, however improbable, must be the truthiness" - Holmes
John Koskinen is a fucking bureaucratic weasel of the highest order. He's a lifelong civil servant scumbag and worthy of being shackled to concrete shoes and dropped into the deepest part of the pacific.
I haven't hear anyone claim that the US gov doesn't want to pay its debts, and it constitutionally must pay them so it is moot point. I sure wasn't saying that nor was I trying to imply that and was merely pointing out for the uninformed how things are structured and how we got there. There are problems facing the government once the bond redemption starts in earnest and those are mostly ignored which is the other point I was trying to make. The budget is already a mess and Social Security is just going to gradually make a bigger mess but I doubt anyone would know the difference.
I wouldn't say Social Security is properly funded for decades as the date the trust fund runs out is in 2033 according to the last Trustees Report which is the point at which it will be unable to pay full benefits. So less than 2 decades which means you will likely be caught up in it. The point at which it starts to take in less in taxes and interest and begin to draw down the trust fund.
So the decisions that one wants to make is how to deal with the problem and there really are a finite number of solutions. They could:
1. Raise taxes to ensure social security is fully funded. (democrat plan)
2. Decrease the rate at which benefits increase. (Republican plan)
3. Some combination of 1 & 2
4. Ignore the problem and in 2033 just fully fund it out of the general fund. (what will happen from 2017 to 2033)
5. Ignore the problem and in 2033 tell all social security recipients to fuck off and enjoy their 75%. (what the current plan out of the US government is)
Time to offend someone
I agree that the IRS should be able to do much more with the budget it has. It is far from efficient. On the other hand, we should probably be more careful with cutting spending on the IRS than most other government agencies. This is because cutting in the wrong areas will cost much more than you save. Cutting enforcement by $1 may cost $6 if Treasury Secretary Jack Lew is to be believed. I would also guess that a budget item for modernization efforts may be a similarly foolish place to look for cuts.
I lived around the corner from a major IRS processing facility in Fresno, California for many years. I can assure you that the neighborhood and the entire metropolitan area around it look nothing like these 5 counties (I've been to Fairfax County and Arlington County).