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Washington, D.C.—Tax Day 2008 finds the Internal Revenue Service (IRS) with a significantly depleted workforce and a sharply-rising workload exacerbated by the economic stimulus rebate program and a large number of amended paper tax returns resulting from late congressional action on the alternative minimum tax, the leader of the union representing IRS employees said today.

“It is imperative to reverse the severe cuts in IRS staffing levels and begin providing adequate resources to meet these challenges” moving forward, President Colleen M. Kelley of the National Treasury Employees Union (NTEU) said in testimony submitted to the House Appropriations Subcommittee on Financial Services and General Government. The subcommittee is reviewing the proposed fiscal 2009 IRS budget.

Additional staffing and resources will permit the IRS “to meet the rising workload, stabilize and strengthen tax compliance and customer service programs and allow the (agency) to address the tax gap in a serious and meaningful way,” President Kelley added.

The IRS has said its total staffing at year-end 2007 was 86,638, down from 90,115 at the end of 2006, and a figure representing a steady decline going back more than a decade. In 1995, the IRS workforce totaled 114,064 employees. Meanwhile, the steady increase in the number of tax returns filed over that period has boosted the total from some 114 million to more than 134 million.

The administration’s budget proposal for the IRS calls for $11.4 billion, up from the congressionally-enacted $10.9 billion this fiscal year. President Kelley called that another in a series of “insufficient and unrealistic budget requests that fail to allow the agency to meet its customer service and enforcement challenges.”

While some modest progress has been made over recent years in efforts to improve service to taxpayers—NTEU has led the call for such steps—IRS enforcement staff continues to be far below 1995 levels.

The loss of such staff and the institutional knowledge they carry has been especially severe among two groups of employees critical to closing the $345 billion gap between taxes owed and paid, Kelley said. Between 1995 and 2007 the number of revenue officers has fallen by one-third, from 8,139 to 5,468, while the staff of revenue agents has declined by almost 20 percent, from 16,078 to 13,026 over that same period.

“Although it is widely recognized that additional funding for enforcement provides a great return on investment,” Kelley said, “the IRS repeatedly has told Congress it does not need any additional funding above the president’s budget request.”

The wiser course, she said, would be for the IRS to engage in a five-year hiring plan that would gradually rebuild its workforce to pre-1996 levels. An annual net increase of 3 percent would result in about 2,600 positions a year.

She called, as well, for an end to the IRS’s costly and misguided program of using private tax collectors. That program lost $50 million in its first year, and is not expected to break even until fiscal 2010 at the earliest.

NTEU is the largest independent federal union, representing 150,000 employees in 31 agencies and departments.