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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.
Not so fast, Cowboy. They will have the manpower to audit YOU, just not [huge-multinational-name-here].
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.
"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's horrible! Just horrible. Oh, the humanity!
Actually, I'd go with 'yes, if a bit hyperbolic' on this one. Even in a hypothetical libertarian utopia, the military and police functions are deemed within the legitimate scope of the state, and not exactly expected to be paid for by donations and bake sales(in fact, the bake sales would be specifically illegitimate since they'd be a particularly feckless flavor of state industry).
And, if you must have taxation, are you actually better off with incompetent, ideosyncratic, error-prone, and potentially insecure taxation, likely focused on shaking down easy targets in order to save money, rather than aiming for greatest possible procedural uniformity? Obviously, nobody enjoys the fact that things cost money, and essentially nobody would assert that our tax code, our budget, or both(usually both) are remotely optimal; but it is vanishingly unlikely that the reforms you(or anybody else) wants are something you'll be lucky enough to get as a product of the IRS flailing around in absence of the resources to operate as designed, or the state as a whole flailing around in an attempt to deal with budget shortfalls(unexpected ones in particular).
Even the wholly serious 'starve the beast' theorists tend to be dangerously optimistic about the order in which various organs of 'the beast' will atrophy(frequently not the order they want); as well as tending to ignore the fact that, until deficit spending becomes impossible(either through political impasse over debt ceilings, or because the world at large won't buy T-bills anymore) deficit spending actually makes government-provided services more attractive(given that the US government can generally borrow with minimal difficulty and at fairly good rates, the percentage of a given project funded by debt is, at least in the short to medium term, almost indistinguishable from a pure discount. In the suitably long term, or to people who have a gnawing fear of 'debt' as a concept, this is troubling; but aside from them, deficit spending actually makes it easier to sell government programs: even fairly half-assed ideas start to look good at a suitable discount.)
For these reasons, I'd maintain that any gloating about IRS dysfunction is deeply shortsighted and (unless it is specifically helping you avoid scrutiny of your stash in the Caymans), likely even self destructive: There are many potential gains to be realized through improvements in the tax structure and budget; but it is not actually that likely that they will be realized by unsystematic institutional starvation, while the consequences of a system too dysfunctional to even administer the already problematic tax code and budget as they are written are quite unlikely to be improvements.
Bah! Who needs IT peons when you can buy 'Security Solutions' from your favorite vendors? Filthy neckbeards just spend their time pointing out additional problems that they claim to need more money to solve. Who needs people like that?
Pay your taxes hippie.
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
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."
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?"
As someone with a fairly libertarian outlook, I'd like to chime in with my agreement. There is a whole raft of cuts that I'd like to make to the IRS and the tax code generally, but I'm not silly enough to think that de-funding their IT budget is going to help accomplish my goals.
I don't think anyone can make a serious argument that problems with their ability to function are desirable.
OK, here is the argument:
1) The IRS audits certain classes of people a LOT. (I've been audited almost every year for the last 5 years)
2) Normally, they don't find anything worth mentioning. But the taxpayer still had to pay for the audit.
3) So the taxpayer is out several thousand dollars, the "people" gained nothing
4) Repeated across 10 million audits, on average the "people" are gaining FAR less than is being spent by taxpayers on audits
This is a dead-weight loss to our society caused by the IRS auditing too many people. If this was a corporation, they would only audit enough to find most of the cheats - IE, to the cost effective point. But since this is government, instead they hire auditors until they run out of budget money, and audit as many people as possible regardless of actual culpability.
If the IRS lost the ability to do 90% of it's current efforts, it would be better for society.
while (sig==sig) sig=!sig;
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
Anecdote is anecdote.
I've seen a ratio of 1:6 quoted a number of times before as being the dollars spent on audits to tax dollars collected as a result of the audits. Arguably that ratio would have to scale such that at some point it is no longer profitable to perform audits. But currently the IRS budget has been cut repeatedly and as a result it is safe to guess that we are letting more people get away with cheating on their taxes, or making silly mistakes.
My Mother in Law is one of those that made a silly/stupid mistake. She got a divorce after 30 years of marriage, about ten years ago. She cashed out her half of the 401k and used it to start a small school for students with learning disabilities. That is a good and noble endeavor I would say, but she failed to pay any taxes on the 401k money. The IRS took a couple years to figure it out and by that point the money was almost entirely sunk into the business. They worked out a payment plan that didn't cripple her business and even though she faced some lean times it was from her own mistake and now she's free and clear of that debt and has a useful income from the school for her retirement.
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.