Proposal to further slash IRS budget could mean fewer audits

In recent years, the IRS has been forced to operate with a significantly lower budget. Since 2010, IRS funding has been cut by nearly $1 billion. And, after a recent meeting of the House Appropriations Committee, everyone's favorite tax collection agency could be on the chopping block once again.

On June 25, a bill was approved in the House Appropriations Committee that, if it becomes law, will slash the budget of the IRS by an additional three percent. The bulk of the cuts are in business systems modernization and operations. But, enforcement spending would also shrink by one percent.

IRS call service has already reached abysmal levels. Ten years ago in 2004, the agency answered 87 percent of calls. Last year, 40 percent of ringing phones at the IRS went unanswered. If funding is maintained at current levels, the IRS says that the phone service level could drop to 50 percent.

Despite the cuts, the IRS claims that it will be able to increase voluntary compliance rates. Less than one percent of individual tax returns will be audited by the IRS next year, but with more technologically advanced enforcement tools at the disposal of the IRS, the agency is becoming less reliant on high numbers of audits.

Despite the IRS budget troubles, you should not get too confident in your ability to avoid an audit. While audit levels remain at historically low levels, these days, IRS audits are more targeted. With new tools in place, like a law that requires offshore banking institutions to provide the IRS with information about American account holders, it is easier for the IRS to find the right individuals to audit. If you are being audited, remember that a comprehensive legal defense is critical to resolving your tax dispute in the most favorable manner possible.

Source: Forbes, "IRS Strategic Plan Highlights Effects Of Budget Cuts," Jeremy Scott, July 2, 2014

No Comments

Leave a comment
Comment Information
Email Our Team

Contact Us to Get Started Today

Located in the Washington, D.C area, we serve clients in the District of Columbia, Maryland and Northern Virginia, as well as across the country and overseas. For a free initial consultation, call 202-381-1261 or complete our brief online form.

Bold labels are required.

Contact Information

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.


Privacy Policy

Six Convenient Office Locations in and around the DC Metropolitan Area

Washington, D.C.
1050 Connecticut Ave NW #500
Washington, D.C. 20036

Phone: 202-618-1873
Fax: 888-235-8405
Washington Law Office Map

Columbia Office
10440 Little Patuxent Parkway, Suite 300
Columbia, MD 21044

Phone: 202-618-1873
Phone: 410-497-5947
Fax: 888-235-8405
Columbia Law Office Map

Annapolis Office
839 Bestgate Road
Suite 400
Annapolis, MD 21401

Phone: 202-618-1873
Phone: 410-497-5947
Fax: 888-235-8405
Annapolis Law Office Map

Fairfax Office
8280 Willow Oaks Corporate Drive
Suite 600
Fairfax, VA 22031

Phone: 202-618-1873
Phone: 703-988-4817
Fax: 888-235-8405
Fairfax Law Office Map

Rockville Office
199 E. Montgomery Avenue
Suite 100
Rockville, MD 20850

Phone: 202-618-1873
Phone: 240-599-5009
Fax: 888-235-8405
Rockville Law Office Map

Baltimore Office
400 East Pratt Street
8th Floor
Baltimore, MD 21202

Phone: 202-618-1873
Phone: 443-743-3381
Fax: 888-235-8405
Baltimore Law Office Map