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The Administration's Fiscal 1986 Budget Request for the Internal Revenue Service

Published: Apr 29, 1985. Publicly Released: Apr 29, 1985.
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Highlights

Testimony was given concerning the tax administration operations and activities which GAO has reviewed for the past several years. GAO found that, while improvements allow the Internal Revenue Service (IRS) to make its existing resources more efficient, it needs additional resources to effectively administer the nation's tax system. The IRS workload continues to increase due to: (1) a decline in voluntary compliance with tax laws; (2) a rise in special compliance problems; (3) an increase in tax law complexity; (4) an increase in the number of returns filed; and (5) an increase in the requests for assistance from taxpayers. The tax system provides about 90 percent of the revenues for financing the government's programs and activities. To ensure that the system provides the maximum revenue at the least cost, IRS must obtain the highest degree of voluntary compliance with the tax laws possible. However, a growing number of people are not complying voluntarily resulting in billions of dollars in lost tax revenues each year. Special compliance problems, such as abusive tax shelters and illegal tax protesters, have further jeopardized the tax system. GAO found that IRS resources have failed to keep up with increases in tax return filings, delinquent accounts, and return inventories and, despite large delinquency inventories, IRS continues to reduce its collection staff and revenue officers. GAO believes that administrative and legislative actions could use existing resources more efficiently; however, additional resources are needed if IRS is to maintain the tax system's integrity and achieve maximum revenue collection.

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