The Actual Costs of Reduced Funding for the IRS

Some members of Congress are pushing to hold back an additional $20 billion on top of the $20 billion already taken away of the $80 billion Congress gave the IRS two years ago.

Sounds good, right?

No one likes the idea of the IRS getting additional funding if, as these members of Congress claim, they’re going to turn around and harass everyday Americans.

But what if a reduction in funding actually HURTS taxpayers’ ability to resolve their tax debts?

What if the real problem isn’t just their tax debt?

What if it’s an understaffed, underfunded, and overburdened IRS itself?

Introduction:

As a tax professional who cares about helping your clients succeed, understanding the ripple effects of IRS funding cuts is critical.

Why?

Because the way the IRS operates directly impacts how effectively tax debt issues can be resolved.

Today, we’ll explore 3 reasons why a decrease in IRS funding is actually a bad thing for taxpayers.

3 Reasons a Reduction in Funding Actually HURTS Taxpayers

1. Taxpayers Bear the Brunt of Outdated Systems & Fewer Employees Working the Phones

The modernization of the current IRS isn’t about shiny new tech.

It’s about efficiency.

How often have you or your clients waited on hold with the IRS for hours, only to get incomplete answers or, even worse, get the "courtesy disconnect."?

Hiring more customer service employees alleviates these frustrations, while reduced funding allows this terrible system to continue.

This isn’t just your problem—it’s a total nightmare for your clients.

Just as concerning, technology at the IRS is stuck in the 20th century... 25 years later.

And to be honest, we’re talking closer to 1960 rather than 1999.

Either way, it’s a serious drag on efficiency.

Fewer resources for customer service, slower responses to resolution proposals, backlogged cases, missed deadlines, and endless frustration for taxpayers.

When your client is grappling with tax debt, these inefficiencies can mean missed opportunities to resolve issues quickly, and taxpayers who are trying to do the right thing are left holding the bag.

2. Data is Becomes Increasingly Less Secure

Think your clients’ data is secure?

Not necessarily.

The IRS fights off over 1.4 billion cyberattacks annually.

Without ongoing upgrades to data security software, taxpayers’ sensitive information becomes more vulnerable each and every year.

Imagine a swath of everyday Americans having to pick up the pieces after their personal financial details were compromised because of an ideological political battle between the parties.

3. Enforced Collections Like Levies and Liens Become Preferrable Over Resolutions

When the IRS is underfunded, it shifts priorities—and not in taxpayers’ favor.

Underfunding forces the IRS to prioritize collections over resolutions and pushes more aggressive automated enforcement actions.

Automated liens and levies become the default.

That’s bad news for taxpayers who already feel trapped by tax debt hanging over their heads.

TL;DR:

• Outdated IRS systems hurt taxpayers by delaying resolutions and compounding stress.
• Data security is critical, but IRS funding cuts compromise taxpayer safety.
• Fewer resources at the IRS mean worse, more aggressive collection tactics, impacting taxpayers directly.

Lets Talk....

Do you think reduced funding for the IRS is a good thing or a bad thing?

Let us know how you feel and why in the comments below!