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Philip L. Liberatore, CPA Discusses the Importance of Having an Adequately Staffed IRS

For more than a decade now, the Internal Revenue Service (IRS) has regularly lamented the steady funding decline that has left it struggling with a chronic personnel shortage and a woefully outdated technological infrastructure. While lawmakers are currently not in agreement about the parameters of an IRS budget increase, there is a consensus that the agency does need more funds to resolve the issues that prevent it from operating at optimal efficiency. “The proposed $80 billion boost to IRS funding over the next ten years is considered excessive by some lawmakers, but there is no doubt that the agency is in dire need of replenishing its workforce and needs more money to do it,” comments Philip L. Liberatore, CPA , a California-based provider of accounting, tax, and financial management services. “Without adequate staffing, the IRS has little hope of efficiently administering the country’s tax laws and offering taxpayers quality service, which ultimately leads to less money flowing into the public coffers.”

In his IRS Progress Update FY 2020, IRS Commissioner Charles Rettig noted that the agency had lost almost 33,400 full-time workers between fiscal 2010 and2020, with affected areas including operationssupport, taxpayer service, andenforcement. “A top priority for the IRS is shrinking the tax gap, which the Treasury estimates at approximately $600 billion annually,” says Philip Liberatore, founder and president of Philip L. Liberatore, CPA. “One strategy for reducing that gap is addressing tax avoidance among the top 1% of earners, who are estimated to account for 28% of unpaid taxes. Their lack of compliance translates into an annual revenue loss of about $163 billion, according to the Treasury, so sufficient enforcement personnel is critical for strong tax administration.”

Addressing the Senate Finance Committee in June,Rettig pointed out that the agency had lost about 13,400 enforcement officers between fiscal 2010 and 2020, including “revenue agents and revenue officers who audit tax returns and perform collection activities, as well as special agents who investigate tax-related crimes and other issues.” While stronger enforcement capabilities are essential for reducing the tax gap meaningfully, adequate staffing at all levels is also critical for improving service quality and compliance, Rettig said as he made his case for a budget increase at the IRS. A boost to the workforce will also enable the agency to increase its oversight of tax preparers, ensuring that vulnerable citizens are not preyed upon.

The economic and social turmoil triggered by the global pandemic has also highlighted the need for customer service improvement, Philip L. Liberatore, CPA notes. Even in “normal” years, the IRS has found it exceptionally challenging to handle the phone calls made by taxpayers.According to theNational Taxpayer Advocate’s 2020 Annual Report to Congress, “In FY 2020, the IRS received 100.5 million telephone calls. Employeesanswered only 24% of those calls, with hold times averaging 18 minutes. Put differently, IRS employeesdid not answer more than 75 million telephone calls from taxpayers seeking help in complying with their taxobligations.” Having an adequately staffed customer service operation will aid the IRS in achieving its goal of answering 75% of phone calls, as stated by Rettig. In addition to helping people comply with their tax obligations, such an achievement willsignificantly impede the efforts of opportunistic playersto profit from the difficulties experienced by taxpayers.

Philip L. Liberatore, CPAwas launched in 1988 by veteran CPA and entrepreneur Philip Liberatore. Operating from a base in La Miranda, California, the company provides accounting services and financial guidance to enterprises and individuals across Southern California. Philip L. Liberatore, CPA has built its reputation on providing personalized customer care,consistently abiding by the highest professional standards, offering a comprehensive service portfolio, and firmly focusing on maximizing outcomes for its clients.

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