The
tax system will break down if Congress continues to slash funding for the
Internal Revenue Service, Commissioner John Koskinen warned in a speech to the
Council for Electronic Revenue Communication Advancement.
"It's
not a question of whether. It's a question of when," Koskinen said.
The
system will fail, he said, because the IRS's outdated information technology
system, which has applications from the 1960s, won't be able to handle the tax
filing season.
"As
you've heard me say before, our funding is now $900 million below the 2010
level," Koskinen said. "While we wait to see what our full-year
funding will be, it's important to realize the IRS is now beyond a discussion
about how the agency does not have adequate resources. We have moved into an
area of high risk in terms of how our lack of funding is undermining our
operations."
Another reason Koskinen
said the system will fail: the lack of funding has caused audit rates to
fall to historically low levels, which will increasingly influence taxpayers
not to follow tax laws and gamble they will not be caught. Koskinen noted
that ours is a voluntary tax reporting system that relies on individuals filing
returns and paying their fair share of taxes because they are confident that
others are also paying their fair share. Once that belief is undermined
by increasing tax avoidance, belief in the system cannot be gained overnight.
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