As the IRS has fallen further and further behind on collecting the debts of those who filed a return but didn’t pay their taxes, many of those obligations have been allowed to surpass the 10-year statute of limitations.“For our customers,” says Jay Freeborne, a tax professional in Seattle who advises clients with tax debts, “those are touchdowns. When debts expire, we high-five them.”
“This is a great time for not being compliant with paying taxes,” says Richard Schickel, a former IRS collection agent who now counsels taxpayers. “I have 11 clients who owe more than $1 million who are not being worked at all.”
As Reicks toured different parts of the IRS, she was impressed by her colleagues. But she was working 80-hour weeks, often advising on offshore issues in addition to her current assignment, and living for chunks of time in hotels. On top of all that, her mother and brother had died in the same month.
She decided not to put herself up for promotion and moved back to Nebraska, to live in Omaha near her sister. She returned to her old job of supervising offshore audits full-time. But by then, in 2017, things had grown noticeably worse.
Reicks looked forward to the end of the year, when she’d reach 30 years of service and be eligible to retire with full retirement benefits. She’d always thought she’d stay longer than that. But she realized that she couldn’t.
“I got tired,” she said.
It’s unclear when—or whether—Congress might begin to reinvest in the IRS. The best that can be said is that it’s been a few years since the last deep cut.
In 2015, when the IRS’s ability to answer taxpayer phone calls hit a low point, the budget discussions on Capitol Hill took a turn. Republicans agreed to boost the agency’s funding—but only part of it. The “taxpayer services” portion, which goes toward hiring seasonal employees to answer the phones, got bumped up. The “enforcement” portion of the budget continued to be pared: Today, adjusting for inflation, it’s $1.5 billion lower than it was in 2010, a decrease of 23 percent.
This year, Republicans again selectively increased IRS funding. The massive new tax-cut law has dumped loads of extra work on the IRS, which now has to write rules interpreting the legislation, reprogram aged computer systems, and retrain its employees. Republicans understand that if the IRS fails to roll out their tax overhaul well, they might feel the political consequences. To help the agency cope, Congress handed it an extra $320 million, with the instruction that the money be used solely to implement the new law.
The budget for 2019 is likely to be more of the same. When asked whether lawmakers might eventually provide increased funds to hire auditors and collectors, Republican Hill staffers told us that the members of Congress they work for will follow the lead of the new IRS commissioner, Charles Rettig. If Rettig, who was confirmed in September, asks for more money for the 2020 budget, Congress might support it, they said.