Serrano statement at hearing on IRS 2016 budget request

Thank you Mr. Chairman.  I would also like to welcome Internal Revenue Service Commissioner John Koskinen back before the subcommittee. 

We are here today at a very serious time for the Internal Revenue Service.  Last year, the IRS budget was cut by $346 million dollars, leaving the agency at the lowest level of funding since fiscal year 2008.  Since fiscal year 2010, the IRS has been cut by more than $1.2 billion.  And if some in the other party had had their way, they would have been cut even further.

The results of these cuts are predictable.  Is it a surprise to anyone that the IRS telephone response rates have plummeted?  Is it news to anyone that the IRS is unlikely to collect as many taxes when we reduce their funding in such a ham-handed way?

This subcommittee has a constant debate about the impact of additional dollars in the IRS's budget.  But today we debate the converse- what is the impact of less dollars to the IRS and to this nation?  We are already finding out.  In this fiscal year, the cut of $346 million is expected to result in a $2 billion dollar reduction in taxes collected.  The math is simple.  For every dollar this subcommittee cut from the IRS last year, this country lost almost $6 dollars in tax revenue that is owed to it.

These are not numbers that can simply be made up by efficiencies- no matter how hard people may try. That is not a sustainable course.  As the responsibilities of the IRS grow, we simply cannot keep pretending the IRS can do more with less.  The numbers already tell us that they cannot.

And this brings me to the IRS's fiscal year 2016 budget request.  Your budget requests significant investments in the agency to reverse the cuts sustained by the agency over these last few years.  Your proposal plans to invest in much needed efforts to assist taxpayers, to fight against identity theft, to implement the Affordable Care Act and the Foreign Account Tax Compliance Act, and to go after offshore tax cheats.  From your proposed enforcement efforts alone, you expect to collect an additional $3.47 billion by fiscal year 2018.

It is our job on the appropriations committee to vet the budget requests of the administration- and that is what we will do here today.  But it is also our job to make sure that agencies have the resources to run effectively- and with regard to the IRS, we have failed in that responsibility.  Moreover, the cuts to the IRS don't just impact the agency or even the American taxpayer- they impact our deficit.  No one here can claim the mantle of fiscal responsibility if they plan to support excessive and harmful cuts to the very agency that brings in more than 90 percent of our revenue.  It is time to stop punishing the IRS, and time to start reinvesting in the one part of the federal government that most Americans have an interaction with. 

Commissioner Koskinen, welcome back, and I look forward to your testimony.

Thank you, Mr. Chairman.