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The answer is a combination of industry lobbying (see elsewhere in this thread) and partisan politics that result in deliberately under-funding the IRS (for a g

The answer is a combination of industry lobbying (see elsewhere in this thread) and partisan politics that result in deliberately under-funding the IRS (for a general notion, see https://en.wikipedia.org/wiki/Starve_the_beast https://en.wikipedia.org/wiki/Starve_the_beast, and for more directly relevant events see https://www.propublica.org/article/how-the-irs-was-gutted https://www.propublica.org/article/how-the-irs-was-gutted)

hackernewds 3y ago
[flagged]
- nerdponx 3y ago
  The $80B is new, and until recently they were understaffed and underfunded. It's like a poor person finally getting Section 8 housing, and then you turn around and accuse them of being wasteful and inefficient with their spending, because they have a house so they clearly aren't as poor as they say. Also the $80B and 87k agents is slightly overstating what they are actually going to get. See e.g. https://www.forbes.com/sites/insider/2022/10/20/the-reality-of-increased-irs-funding https://www.forbes.com/sites/insider/2022/10/20/the-reality-.... Is it possible that the IRS lacks the engineering management expertise to build an effective in-house software team? Sure. Is it possible that they won't spend their money efficiently as a result? Sure. Is it possible that they'll hire B-grade programmers, because the top people won't want to move to some random suburb in MD to work for $120k/year? Sure. But to somehow accuse the IRS of having "massive" funding and imply that they are in fact well-supported is just disregarding the facts of recent history.
- neon_electro 3y ago
  Tax law enforcement is not the same as the end user experience of taxpayers.
- akira2501 3y ago
  Precisely. They'll spend $80b to hire "agents." They won't spend a time to make the system actually easy to use. They're not underfunded, they're just incompetent.
  - actuallyalys 3y ago
    There's certainly room to debate how the IRS is spending its money, but they've spent some of it on responding to taxpayer questions, resulting in a decrease in wait times and other improvements: https://home.treasury.gov/news/press-releases/jy1421 https://home.treasury.gov/news/press-releases/jy1421. These are their own metrics, so it's possible they're being gamed in some way, but it's not true no money is going toward helping taxpayers.
  - atombender 3y ago
    Not quite. Of the $79B, $46B was earmarked tax law enforcement, while $4.8B is designated tax processing modernization, including a plan to replace the current legacy systems (IMF and others that are written in a combination of COBOL and assembly language and that run on 1960s mainframes against IBM VSAM data files, and which the IRS have been trying to replace since the 1990s) by 2028. That money is supposed to be spent that way, and the IRS have to get approval from Congress' House and Senate Appropriations Committee (and TIGTA, Office of Management and Budget, and GAO must all sign off on each request) for all their expenses. I won't disagree that their IT woes seem to be in large part due to incompetence, however.
- mjamesaustin 3y ago
  IRS funding is objectively efficient. Every additional $1 spent on IRS budget brings in $5-9 of additional funding through enforcement. https://www.cbo.gov/publication/57444 https://www.cbo.gov/publication/57444
  - vkou 3y ago
    It's very inefficient for the people who are currently stealing those $5-9.
  - proc0 3y ago
    The efficiency bar has to be particularly low when you consider that it is enforced by law. What incentives do they have to do anything differently when people HAVE to pay them or face consequences. I'm glad they are at least now trying to have a semblance of customer service awareness.
    - viraptor 3y ago
      It's not that easy. The efficiency is actually a benefit for many private companies and it's lobbied very hard. Just look at a comparison with other countries that are also restricted by law and have much nicer systems.
  - ed_elliott_asc 3y ago
    Why don’t they give the irs 100 trillion? America will be rich I say, rich!
  - victorbjorklund 3y ago
    No, that just means it makes economic sense to spend it. Doesnt mean that IRS is run the most optimal and efficient way. You can have a very inefficient monopoloy that still makes a lot of money because it is a monopoly. One can imagine where IRS is more effcient and 1 dollar spent results in 20 dollars more etc.
    - tomnipotent 3y ago
      > run the most optimal and efficient way Why does that matter? No government agency on the planet is run in the most optimal and efficient way; nor businesses or even households. What actually matters is the trend and how it's current efficacy compares to its past.
- actuallyalys 3y ago
  They did just get a big boost, but this was after years of stagnant funding, as the link in the comment you replied to shows. Comparing government agencies' efficiency to private entities' is tricky since they tend to have different goals and constraints, but I'm not sure 87,000 agents is that many considering the number of households and business that have to pay taxes, and the number of non-profits that don't pay taxes but still file financial information.
- yokem55 3y ago
  The agents being hired are mostly just support agents answering the phone. And on net the investment in improving the IRS is a net positive on revenue because they can more effectively go after folk who are cheating. It's amazing how some folks will be ardently opposed to "defunding the police" ... except for the tax police.
  - wahnfrieden 3y ago
    it's unpopular because IRS only goes after low-level tax cheats, not the already-rich ones who steal far more, and funding them more doesn't change that priority. similar to police.
    - whakim 3y ago
      In this particular case, this funding does change that priority. Janet Yellen has instructed that "any additional resources—including any new personnel or auditors that are hired—shall not be used to increase the share of small business or households below the $400,000 threshold that are audited relative to historical levels" [1]. Unfortunately, auditing extremely wealthy individuals is complicated and expensive because you're pitting underpaid and overworked IRS employees against a wildly complicated tax system that is exploited to the max by the super-rich and their well-remunerated tax lawyers. [1] https://home.treasury.gov/news/press-releases/jy0918 https://home.treasury.gov/news/press-releases/jy0918
    - toomuchtodo 3y ago
      https://www.cnn.com/2023/10/20/politics/irs-millionaire-tax-collection/index.html https://www.cnn.com/2023/10/20/politics/irs-millionaire-tax-... (“IRS has collected $160 million in back taxes by cracking down on millionaires”) https://www.irs.gov/newsroom/irs-announces-sweeping-effort-to-restore-fairness-to-tax-system-with-inflation-reduction-act-funding-new-compliance-efforts https://www.irs.gov/newsroom/irs-announces-sweeping-effort-t... (“IRS announces sweeping effort to restore fairness to tax system with Inflation Reduction Act funding; new compliance efforts focused on increasing scrutiny on high-income, partnerships, corporations and promoters abusing tax rules on the books”)
  - 3y ago
- whakim 3y ago
  This claim is not correct in several ways. The $80B was not earmarked for hiring agents; that was an additional $80B for the entire agency spread over 10 years. While some of that money might be used to hire additional agents, it will also be used to upgrade old technology (the IRS still uses software from the 1950s), make fixed capital investments that have been long-deferred, regulate third-party tax preparers, provide better customer service, crack down on tax evasion and improve enforcement. Additionally, this funding needs to be set in the context of an agency whose budget has shrank 20% over the last decade and whose staffing is set to further shrink through attrition and retirements. The IRS Commissioner testified that the IRS would have to hire 52,000 employees over the next 10 years just to keep staffing at current levels [1]. Finally, the Treasury has argued that this $80B investment would (conservatively) lead to an additional $700B in tax revenue over the next decade, so this spending ends up being entirely revenue-positive [2]. [1] https://www.irs.gov/newsroom/written-testimony-of-charles-p-rettig-commissioner-internal-revenue-service-before-the-senate-finance-committee-on-the-filing-season-and-the-irs-budget https://www.irs.gov/newsroom/written-testimony-of-charles-p-... [2] https://home.treasury.gov/system/files/136/The-American-Families-Plan-Tax-Compliance-Agenda.pdf https://home.treasury.gov/system/files/136/The-American-Fami... Edit: since this is Hacker News, I thought it worth pointing out that most of the IRS' software is written in COBOL. I can't think of many things more inefficient and cost-ineffective than continually making bit-part upgrades to 60-year-old software written in a language almost no one knows anymore because of a lack of predictable (human and financial) resources needed to rewrite it.
  - a123b456c 3y ago
    I appreciate your corrections and agree with all of them. Yet they do not imply IRS is operating efficiently, as efficiency is left undefined. If we're talking about social efficiency, the tax code appears massively inefficient to me. I believe the tax code should be redesigned to reduce that inefficiency. That may obviate many IRS needs for resources.
    - tomnipotent 3y ago
      > yet they do not imply IRS is operating efficiently The IRS budget for 2020 was $11.5bln to support $3.42 trillion in tax receipts, so I'm not sure that's inefficient. Could it be more efficient? Sure, but it's not as bad as people like to paint it. For comparison, the Los Angeles Unified School District budget alone for that same year was $15bln.

hackernewds 3y ago

[flagged]

nerdponx 3y ago
The $80B is new, and until recently they were understaffed and underfunded. It's like a poor person finally getting Section 8 housing, and then you turn around and accuse them of being wasteful and inefficient with their spending, because they have a house so they clearly aren't as poor as they say. Also the $80B and 87k agents is slightly overstating what they are actually going to get. See e.g. https://www.forbes.com/sites/insider/2022/10/20/the-reality-of-increased-irs-funding https://www.forbes.com/sites/insider/2022/10/20/the-reality-.... Is it possible that the IRS lacks the engineering management expertise to build an effective in-house software team? Sure. Is it possible that they won't spend their money efficiently as a result? Sure. Is it possible that they'll hire B-grade programmers, because the top people won't want to move to some random suburb in MD to work for $120k/year? Sure. But to somehow accuse the IRS of having "massive" funding and imply that they are in fact well-supported is just disregarding the facts of recent history.
neon_electro 3y ago
Tax law enforcement is not the same as the end user experience of taxpayers.
akira2501 3y ago
Precisely. They'll spend $80b to hire "agents." They won't spend a time to make the system actually easy to use. They're not underfunded, they're just incompetent.
- actuallyalys 3y ago
  There's certainly room to debate how the IRS is spending its money, but they've spent some of it on responding to taxpayer questions, resulting in a decrease in wait times and other improvements: https://home.treasury.gov/news/press-releases/jy1421 https://home.treasury.gov/news/press-releases/jy1421. These are their own metrics, so it's possible they're being gamed in some way, but it's not true no money is going toward helping taxpayers.
- atombender 3y ago
  Not quite. Of the $79B, $46B was earmarked tax law enforcement, while $4.8B is designated tax processing modernization, including a plan to replace the current legacy systems (IMF and others that are written in a combination of COBOL and assembly language and that run on 1960s mainframes against IBM VSAM data files, and which the IRS have been trying to replace since the 1990s) by 2028. That money is supposed to be spent that way, and the IRS have to get approval from Congress' House and Senate Appropriations Committee (and TIGTA, Office of Management and Budget, and GAO must all sign off on each request) for all their expenses. I won't disagree that their IT woes seem to be in large part due to incompetence, however.
mjamesaustin 3y ago
IRS funding is objectively efficient. Every additional $1 spent on IRS budget brings in $5-9 of additional funding through enforcement. https://www.cbo.gov/publication/57444 https://www.cbo.gov/publication/57444
- vkou 3y ago
  It's very inefficient for the people who are currently stealing those $5-9.
- proc0 3y ago
  The efficiency bar has to be particularly low when you consider that it is enforced by law. What incentives do they have to do anything differently when people HAVE to pay them or face consequences. I'm glad they are at least now trying to have a semblance of customer service awareness.
  - viraptor 3y ago
    It's not that easy. The efficiency is actually a benefit for many private companies and it's lobbied very hard. Just look at a comparison with other countries that are also restricted by law and have much nicer systems.
- ed_elliott_asc 3y ago
  Why don’t they give the irs 100 trillion? America will be rich I say, rich!
- victorbjorklund 3y ago
  No, that just means it makes economic sense to spend it. Doesnt mean that IRS is run the most optimal and efficient way. You can have a very inefficient monopoloy that still makes a lot of money because it is a monopoly. One can imagine where IRS is more effcient and 1 dollar spent results in 20 dollars more etc.
  - tomnipotent 3y ago
    > run the most optimal and efficient way Why does that matter? No government agency on the planet is run in the most optimal and efficient way; nor businesses or even households. What actually matters is the trend and how it's current efficacy compares to its past.
actuallyalys 3y ago
They did just get a big boost, but this was after years of stagnant funding, as the link in the comment you replied to shows. Comparing government agencies' efficiency to private entities' is tricky since they tend to have different goals and constraints, but I'm not sure 87,000 agents is that many considering the number of households and business that have to pay taxes, and the number of non-profits that don't pay taxes but still file financial information.
yokem55 3y ago
The agents being hired are mostly just support agents answering the phone. And on net the investment in improving the IRS is a net positive on revenue because they can more effectively go after folk who are cheating. It's amazing how some folks will be ardently opposed to "defunding the police" ... except for the tax police.
- wahnfrieden 3y ago
  it's unpopular because IRS only goes after low-level tax cheats, not the already-rich ones who steal far more, and funding them more doesn't change that priority. similar to police.
  - whakim 3y ago
    In this particular case, this funding does change that priority. Janet Yellen has instructed that "any additional resources—including any new personnel or auditors that are hired—shall not be used to increase the share of small business or households below the $400,000 threshold that are audited relative to historical levels" [1]. Unfortunately, auditing extremely wealthy individuals is complicated and expensive because you're pitting underpaid and overworked IRS employees against a wildly complicated tax system that is exploited to the max by the super-rich and their well-remunerated tax lawyers. [1] https://home.treasury.gov/news/press-releases/jy0918 https://home.treasury.gov/news/press-releases/jy0918
  - toomuchtodo 3y ago
    https://www.cnn.com/2023/10/20/politics/irs-millionaire-tax-collection/index.html https://www.cnn.com/2023/10/20/politics/irs-millionaire-tax-... (“IRS has collected $160 million in back taxes by cracking down on millionaires”) https://www.irs.gov/newsroom/irs-announces-sweeping-effort-to-restore-fairness-to-tax-system-with-inflation-reduction-act-funding-new-compliance-efforts https://www.irs.gov/newsroom/irs-announces-sweeping-effort-t... (“IRS announces sweeping effort to restore fairness to tax system with Inflation Reduction Act funding; new compliance efforts focused on increasing scrutiny on high-income, partnerships, corporations and promoters abusing tax rules on the books”)
- 3y ago
whakim 3y ago
This claim is not correct in several ways. The $80B was not earmarked for hiring agents; that was an additional $80B for the entire agency spread over 10 years. While some of that money might be used to hire additional agents, it will also be used to upgrade old technology (the IRS still uses software from the 1950s), make fixed capital investments that have been long-deferred, regulate third-party tax preparers, provide better customer service, crack down on tax evasion and improve enforcement. Additionally, this funding needs to be set in the context of an agency whose budget has shrank 20% over the last decade and whose staffing is set to further shrink through attrition and retirements. The IRS Commissioner testified that the IRS would have to hire 52,000 employees over the next 10 years just to keep staffing at current levels [1]. Finally, the Treasury has argued that this $80B investment would (conservatively) lead to an additional $700B in tax revenue over the next decade, so this spending ends up being entirely revenue-positive [2]. [1] https://www.irs.gov/newsroom/written-testimony-of-charles-p-rettig-commissioner-internal-revenue-service-before-the-senate-finance-committee-on-the-filing-season-and-the-irs-budget https://www.irs.gov/newsroom/written-testimony-of-charles-p-... [2] https://home.treasury.gov/system/files/136/The-American-Families-Plan-Tax-Compliance-Agenda.pdf https://home.treasury.gov/system/files/136/The-American-Fami... Edit: since this is Hacker News, I thought it worth pointing out that most of the IRS' software is written in COBOL. I can't think of many things more inefficient and cost-ineffective than continually making bit-part upgrades to 60-year-old software written in a language almost no one knows anymore because of a lack of predictable (human and financial) resources needed to rewrite it.
- a123b456c 3y ago
  I appreciate your corrections and agree with all of them. Yet they do not imply IRS is operating efficiently, as efficiency is left undefined. If we're talking about social efficiency, the tax code appears massively inefficient to me. I believe the tax code should be redesigned to reduce that inefficiency. That may obviate many IRS needs for resources.
  - tomnipotent 3y ago
    > yet they do not imply IRS is operating efficiently The IRS budget for 2020 was $11.5bln to support $3.42 trillion in tax receipts, so I'm not sure that's inefficient. Could it be more efficient? Sure, but it's not as bad as people like to paint it. For comparison, the Los Angeles Unified School District budget alone for that same year was $15bln.