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Congressional cuts to IRS budget just make life easier for tax cheats

News from Washington, D.C., last month reported that the Internal Revenue Service would be conducting fewer audits of tax returns this year than in prior years. In fact, the number of audits has been dropping for years due to congressional cuts in funding for the IRS.

For returns filed for the 2014 tax year, the chances of being audited are expected to be at an 11-year low.

For tax cheats, rich or not so rich, this is great news. Fewer audits mean there is less chance of being caught. In fact, reports of fewer IRS audits could encourage more tax cheating.

For honest taxpayers, the news of fewer audits might seem like good news — nobody wants to go through the unpleasant experience of a tax audit. But the truth is that fewer audits being conducted is bad news for honest taxpayers because the difference between the amount of money owed on taxes and the amount collected by the IRS has to be made up by honest taxpayers — or added to the national debt.

Congress has been cutting funding to the IRS, in part, because the tax collection agency is the one part of the federal government nearly everyone loves to hate. Congress has cut back funding for the agency about 10 percent since 2010.

So, with smaller budgets, the IRS has 8 percent fewer employees than in 2010 — and this is happening as the number of tax returns filed has grown nearly 5 percent.

And while the tax collection agency can be heavy handed in its dealing with taxpayers and it’s not known for friendly customer service, IRS bashing is misguided — and misplaced.

Tax collection is a thankless job. Nobody enjoys paying taxes. The incredibly complex and loophole ridden tax code makes the job much tougher — and blame for that falls squarely on Congress, not the IRS.

It’s individual members of Congress, often at the urging of campaign contributors, who add complexity and loopholes, which can mean tax savings of millions or hundreds of millions of dollars for special interests.

Making matters worse, the IRS is under assault by identity thieves who use stolen Social Security numbers to file bogus tax refund claims, getting away with millions in money owed to legitimate taxpayers. Budget cuts from Congress mean there is less manpower at the IRS to stop this latest tax cheating scheme.

More attention should be paid to the epidemic of bogus tax refund scams. Last year, the IRS paid about $6 billion on fraudulent refund requests. The agency says it’s trying to watch for fraudulent refund requests, but crooks seem to be at least one step ahead.

There should quick and easy steps the IRS can take, such as requiring a personal PIN number, similar to what debit cards use. Or taxpayers should have to answer security questions, similar to what most online banking websites require — such as the taxpayer’s mother’s maiden name, or the city where born, before any tax refunds are issued.

Overall, Congress should reverse its pattern of cutting the IRS budget and instead increase funding, particularly for more auditors and anti-fraud efforts. It should be a no brainer, since for every $1 spent on enforcement at the IRS, and additional $6 is brought into the U.S. Treasury.

Do Republicans in Congress really want to be on the side of tax cheats? If not, they should boost funding for the IRS for more audits and fraud detection.

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