WASHINGTON – President Donald Trump is proposing to reduce the budget for the Internal Revenue Service, the federal tax collector that the president previously complained was treating him unfairly.
The IRS would give up $239 million in Trump's proposed budget, published Thursday morning, the latest in a series of cuts since 2010.
Reducing the agency's budget might not save money, experts on taxes warn, because the IRS will have fewer agents to sniff out tax dodgers.
IRS Commissioner John Koskinen, who was appointed by President Barack Obama, has said that each dollar spent at the agency results in $4 in unpaid taxes returned to the Treasury. Trump's treasury secretary, Steve Mnuchin, has also said that a lack of resources for the agency is already costing the government money.
The agency spent $12.4 billion in 2011, accounting for the vast majority of the Treasury's budget. By 2015, that figure dropped to $11.4 billion. The retrenchments have meant fewer audits – and more hassle for taxpayers.
The agency's data show the average time taxpayers spend waiting on the phone to talk with an IRS representative has increased from three minutes in 2004 to 18 minutes last year.
The agency only examined 0.7 percent of individual returns in 2016, the latest year for which data are available. In 2010, it was 1.1 percent.
The proposed budget states that by relying more on computers and less on paper, the agency will be able to save money. Yet the lack of funds has made it difficult for the IRS to modernize, said Mark Mazur, director of the nonpartisan Tax Policy Center.
All the same, the reductions in Trump's budget were not as extreme as some feared. The New York Times had previously reported that IRS budget would be reduced by 14 percent, or about $1.6 billion.
"We recognize that you have to run the IRS to collect the taxes," Mick Mulvaney, Office of Management and Budget director, told reporters in a conference call Wednesday.
Overall, the Treasury Department would escape the most severe reductions in Trump's proposed budget, which drastically reduces funding for a range of federal agencies outside the Pentagon. The budget calls for a relatively modest cut of 4 percent, or just over $500 million.
In addition to the cuts at the IRS, the proposal would eliminate a program designed to improve access to banking services in distressed neighborhoods, saving $210 million.