IRS to Congress: Cut Our Budget and You'll Cut Tax Revenue
House Ways and Means Committee member John Lewis, D-Ga., made a strategic move on Monday, releasing a letter he received from IRS Commissioner Doug Shulman warning against plans by House and Senate appropriators to cut the IRS budget.
Cutting the tax agency's resources by some $600 million as proposed would "lead to noticeable degradation of both service and enforcement and would have a serious detrimental impact on voluntary compliance for years to come, Shulman wrote. The quantified result? A loss of $4 billion in collected revenue, or seven times the savings from the budget haircut, Shulman said.
Republican communications staff on Ways and Means countered with a statement arguing that freezing the IRS budget does not automatically translate into reduced revenue. In 2007, the agency enjoyed no new budget authority but managed to boost enforcement revenue by 17 percent, they argued. "By contrast, in 2010, the IRS did less with more and only collected $57.6 billion in enforcement revenue despite enjoying a handsome budget of $12.1 billion."
Correction: The original version of this item incorrectly stated that John Lewis was the ranking minority member of the Ways and Means Committee. The item has been updated to correct the error.