The Adequacy of IRS' Resources

GAO discussed the adequacy of the Internal Revenue Service's (IRS) resources for fiscal year 1983. IRS needs additional resources to effectively administer the tax system and collect revenues required to defend and operate the Nation. GAO believes that administrative and legislative actions can be taken which would allow IRS to make more efficient and effective use of its existing resources. However, these actions alone will not be sufficient; the IRS workload continues to grow. The tax system is based on voluntary compliance, but growing numbers of people are unwilling to comply, and even a slight decrease in compliance means billions of dollars of lost tax revenue. This is very significant in view of the huge deficits that the Government incurs to meet its obligations. Evidence shows that noncompliance among corporate and individual taxpayers is a serious problem. Interrelated with the noncompliance problem is the scope and complexity of the tax laws which have added to the IRS administrative burden. Tax laws often complicate IRS audits and produce controversies with taxpayers. Tax legislation has caused a sizeable backlog and created the need for new and revised tax forms. IRS must also cope with an increasing workload created by the yearly growth in the population. Various administrative and legislative actions would permit IRS to make efficient and effective use of its existing resources. IRS can improve the management of its compliance programs and other activities to permit more efficient use of resources. IRS management information is such that neither IRS nor GAO can estimate accurately how much revenue will be secured through an increase in resources or which programs provide the best dollar return for each investment. GAO believes that an increase in IRS resources is warranted.