Federal tax revenues to suffer from budget cuts: IRS chief

WASHINGTON Thu Apr 25, 2013 6:26pm EDT

WASHINGTON (Reuters) - The head of the Internal Revenue Service cautioned on Thursday that tax collections will suffer from budget cuts imposed on the agency by Congress.

Speaking at a House of Representatives hearing about the agency's budget, Acting Commissioner Steven Miller said the cuts will reduce the enforcement revenue the IRS collects. He did not provide a dollar estimate of the loss to the U.S. Treasury.

The IRS faces a roughly $600 million mandatory budget cut through September triggered on March 1 by steep government spending cuts known as the sequester. Agency employees face at least five furlough days apiece in that time.

Representative Charles Boustany, the Louisiana Republican who heads the House subcommittee that oversees the IRS, said the IRS sequester cuts should stay in force. He called for a tax reform overhaul to create savings for the IRS.

Citizens for Tax Justice, a left-leaning tax group, estimated on Thursday that every dollar spent on IRS enforcement returns 10 dollars in federal revenues.

The IRS budget has remained flat at $11.8 billion for the last two fiscal years.

President Barack Obama's fiscal 2014 budget called for a $1 billion increase to the IRS budget.

For the 2013 tax season, which ended on April 15, The IRS received nearly 130 million individual filings through April 20, Miller said. That total was less than 1 percent below the 2012 total over the same time period, he said.

The IRS paid out $249 billion in tax refunds through April 20.

(Reporting by Patrick Temple-West; Editing by Howard Goller, Bernard Orr)

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