IRS Budget Inadequate for Answer Service, House Told

Three former commissioners of the Internal Revenue Service said today the Reagan Administration’s IRS budget is too low, especially in the area of providing answers to taxpayers’ questions.

At a hearing before the House Ways and Means subcommittee that oversees the agency, IRS Commissioner Lawrence B. Gibbs defended the budget. Because of cuts required by a deficit-reduction law, Gibbs said, “it is very difficult for me to do anything other than to support it.”

Roscoe L. Egger Jr., Gibbs’ immediate predecessor, noted estimates that under the budget, the IRS taxpayer-service division--which answers questions and provides advice on filling out returns--will be able to operate at only a 65% level.

“Perhaps the saddest aspect of the taxpayer-service problem is that this very significant drop in service comes at a time when both the IRS and the public are faced with the most sweeping tax-law changes in memory,” Egger said.

“Millions of taxpayers who are unnecessarily confused and intimidated will not be able to get their questions answered.”

Jerome Kurtz, who was IRS commissioner during the Carter Administration, called the budget for taxpayer service “a serious mistake and extremely shortsighted.”

A taxpayer who repeatedly calls the IRS for answers about a deduction and gets no answer is “likely to decide the question in his favor,” Kurtz said.

Added Donald C. Alexander, who headed the IRS during most of the Nixon Administration, “Although it may not be possible to measure the increased compliance (and revenue) that results from adequate taxpayer service, basic fairness requires that a government which calls on its citizens to file complete and correct tax returns should not turn away when its citizens seek aid from it to meet their responsibilities.”

Rep. J. J. Pickle (D-Tex.), chairman of the subcommittee, also expressed concern about the taxpayer-service budget. And Jennie S. Stathis of the General Accounting Office said that since the program is so important because of the new tax law, “we think the subcommittee should question the adequacy of IRS’ budget for taxpayer service.”

“I feel the budget is adequate,” Gibbs told the subcommittee, especially since he has asked Congress for authority to transfer up to 5% of the agency’s entire budget from one purpose, such as collection, to another, such as taxpayer service.

The IRS total budget for 1988 is $5.1 billion, up slightly from this year.