The Internal Revenue Service might be on the ropes.
But it still packs a punch.
Verification of that can be readily supplied by legions of individual tax filers and corporate officials who continue to be targeted in IRS fraud probes, notwithstanding the agency’s notably lean look these days.
That the IRS stands comparatively diminished from its unquestionably powerful status of just a few short years ago is adamantly clear to people who are paying attention. A recent ProPublica article on current IRS funding and manpower challenges stresses “a near-decade long campaign by Republicans in Congress to starve the agency of funds.”
The resulting drag on resources has had an obvious effect. Agency staffing levels have been eroded by more than 30% in recent years. Teams of special agents investigating large-scale tax scams and fraudulent overseas asset shielding have disappeared. Reportedly, recent government funding moves have slashed the agency’s budget materially. And in real terms, notes ProPublica, “the enforcement portion of the agency’s budget is down by 23% since 2010.”
Harkening back to that boxing analogy above, such dire data might seem to decisively indicate that the IRS is down for the count.
That determination, though seemingly reasonable, is likely far off the mark. Although weakened, the IRS can still focus a near-awesome level of resources on specific targets, and in fact does so.
And that strategy is exactly what a number of U.S. senators recently applauded and continue to encourage in a letter they sent to IRS Commissioner Charles Rettig.
The legislators are acutely aware of the agency’s thinly stretched resources, but stress that it is still a powerful force when targeting select areas of fraud. The senators state that the IRS should be especially focusing “on tax code violations and financial crimes that may be linked to money laundering.”
It is reportedly uncertain presently whether Rettig will proactively petition legislators for more funds and related resources. There is some evidence from Capitol Hill to indicate that he might get a favorable response if he does.