WASHINGTON May 7 The U.S. federal government
could lose almost $3 billion in revenue during the current
fiscal year because budget cuts are forcing the tax-collecting
Internal Revenue Service to audit fewer people, the agency's
chief said on Wednesday.
Testifying before a congressional panel, IRS Commissioner
John Koskinen said the IRS will audit 100,000 fewer individuals
this year as part of congressionally mandated cuts to the tax
agency's budget. Audits of high-wealth individuals, businesses
and partnerships will also decline, he said.
"This fiscal year, the IRS's key enforcement programs will
operate well below historical levels," said Koskinen, who was
speaking before a House of Representatives subcommittee about
the tax season that ended on April 15.
"We estimate that the government will lose almost $3 billion
in revenues as a result," Koskinen said.
Congress in January cut the IRS's budget by $526 million, or
4 percent, to $11.9 billion for the current fiscal year.
In 2013, total IRS audits fell by 5 percent from 2012 to
reach the lowest level since 2008.
"Our ongoing funding shortfall has major, negative
implications for taxpayers and the tax system," said Koskinen, a
Democrat appointed by President Barack Obama last year.
Koskinen rejected the idea of hiring private-sector debt
collectors to help tax enforcement, saying the IRS's use of
these debt collectors in 2006 proved to be inefficient.
"We ended up losing money," as the IRS had to make sure
taxpayers were not being abused by debt collectors, Koskinen
said. He said the IRS would be better off with more funding to
hire its own revenue agents.
(Reporting By Patrick Temple-West; editing by Andrew Hay)