Don't Mess With Taxes

Even if the IRS can get the 2015 filing season started on time, which despite my optimism* is still questionable given the late passage of the 2014-only tax extenders, next year's full filing season is likely to be a rocky one for both Internal Revenue Service employees and taxpayers.

*Good News (sort of) Update: The IRS expects next year's tax season to start on time, but still be a mess for other reason.

The main reason for potential problems? Not enough workers at the IRS.

The IRS employees who are there are it. The agency is freezing new hires.

And the workers who are there will be asked to do their jobs only within the 40-hour work week because the IRS will halt most overtime pay.

This means that the IRS won't answer about half the calls it will receive during the 2015 tax-filing season.

That's the word from none other than IRS Commissioner John Koskinen.

Koskinen reached out to his employees in the wake of President Obama's signing Dec. 16 of the fiscal year 2015 budget bill that gives the IRS $10.9 billion to spend through next Sept. 30. That is 3 percent less than in FY14 and 12 percent less than what the Administration had sought.

In his written message, Koskinen ran the numbers for his staff. The latest bottom line, according to the commissioner, means that the agency "must absorb a cut of $346 million during the remaining nine months of the year. In addition, we must absorb additional costs of $250 million this year to cover the government-wide pay raise of one percent and additional benefit costs."

"We have found substantial efficiencies in recent years, but there is little left to cut without hitting our core service and enforcement operations," Koskinen continued. "This [coming] year we will have little choice but to do less with less."

That includes, wrote Koskinen, that IRS hiring will be frozen except in the case of "a few mission-critical" circumstances. Critical situations also are the only ones in which OT will be authorized.

And travel will be limited "even further, and that includes my own travel to meet with employees," said Koskinen.

Not exactly the Happy Holidays greeting anyone wants from a boss.

Less IRS help for taxpayers in 2015: It's also bad New Year's news IRS customers, that is, all of us taxpayers hoping to get our returns -- and associated refunds -- processed as smoothly and quickly as possible.

Again, the distressing word directly from the tax commish:

"The cumulative effect of these cuts will significantly undermine our ability to serve taxpayers, and they will touch all of our service, enforcement and support operations.

For the upcoming filing season, we estimate that only about 50 percent of taxpayers who call can reach us over the phone. Some 24 million Americans may not be able to reach us for help. Those who do get through could easily wait 30 minutes or more for limited service.

The budget cut will have an amplified effect on tax enforcement and revenue collection, and the cutbacks in IRS enforcement resources and casework will mean that billions more in taxes owed to the nation will remain uncollected."

Treasury weighs in, too: In addition to hearing from their direct leader, IRS employees also got an end-of-year message from le grandest federal financial fromage.

"I am extremely disappointed with Congress' decision to cut IRS funding," wrote U.S. Treasury Secretary Jacob Lew to IRS staff, according to Politico.

"I believe it is the wrong decision for the IRS and for the country," said Lew. "Nonetheless, the IRS has a job to do and a mission to fulfill for the American people, and I am confident that you, the hard-working employees of the IRS, will do your best in the face of this new challenge and continue to provide the best possible service to the American people."

Union reaction: Joined the ranks of those disgruntled by the lower budget is the National Treasury Employees Union. The NTEU represents, among other federal employees, IRS workers.

NTEU President Colleen Kelley noted in a statement following the budget's passage that Congress has cut IRS funding for five consecutive years.

"This short-sighted decision by Congress to once more deprive the IRS of the necessary resources to do its job will hurt all taxpayers, particularly low-income Americans, minorities, disabled people and retirees on fixed incomes, who cannot afford to pay for private tax-preparation services. America deserves better," said Kelley.

But then, no one has ever accused the House and Senate of being forward thinking.

Remember that as you're on hold with the IRS this coming filing season. If you get through to the agency at all.

You also might find these items of interest:

• IRS taxpayer service outlook, short- and long-term, is bleak
• Cutting IRS budget is a bad idea for taxpayers, U.S. Treasury
• IRS seizes honest taxpayers' assets under forfeiture program