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IRS Oversight Board decries proposed funding cuts

The IRS Oversight Board -- the tax agency's internal ombudsman -- has issued letters to key congressional committees slamming pending legislation that would severely cut its budget and its capabilities.

The IRS Oversight Board – the tax agency's internal ombudsman – has issued letters to key congressional committees slamming pending legislation that would severely cut its budget and its capabilities.

The board sent the letters to the chairs and ranking members of both the House and Senate Appropriations Committees, calling the shortfall that would result from pending legislative proposals "disturbingly large."

The board acknowledged that Congress is under "intense pressure" to cut spending. But the panel also insisted that members calling for sharp cuts in IRS spending are not fully considering the fallout: that the agency, and the federal government, will lose more money than it saves if such cost-cutting hampers tax collection efforts.

"The Oversight Board clearly understands the impact of severe funding restrictions," Colleen Kelley, president of the National Treasury Employees Union which represents thousands of IRS employees, said on Oct. 24. "I urge Congress to do the wise thing for the country and properly fund the IRS."

Kelley previously warned of estimates that proposals to slash as much as $600 million from the fiscal 2012 IRS budget would translate to the loss of 3,000 to 4,000 jobs and could lead to approximately $4 billion in added costs to the taxpayer, in the form of uncollected taxes. The board concurred, finding that such losses would extend each year out to 10 years.

Director Jacob Lew of the Office of Management and Budget said such cuts would "undermine taxpayer service, reduce collections from scofflaws, and add billions of dollars to the deficit."

The Oversight Board has issued a recommended budget for fiscal 2012 of $13.3 billion. But the budgets approved by the House and Senate Appropriations Committees include funding of only $11.5 billion and $11.7 billion, respectively.

For more information visit  www.nteu.org and www.treasury.gov/irsob/.

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