Believe it or not, the IRS is becoming something of a model of efficiency among Washington’s bureaucracies. It collects more taxes every year than ever before, at lower cost per dollar collected than anytime since 1980. It does fewer face-to-face audits, too; most of its enforcement is done by checking electronic data and sending out letters. By the end of this year, its payroll will be about 14% smaller than five years ago, shortened by about 13,000 people. Its technologists have proposed new enforcement projects that would collect $8 to $13 for every dollar spent.
“That’s a return on investment that private businesses would kill for,” notes John Hudak, who studies the management of federal bureaucracies for the Brookings Institution.
And yet the IRS is a whipping boy for Republicans in Congress. They’ve cut the agency’s budget every year for four years. They’ve told the IRS to produce more — more service to taxpayers, more enforcement against tax cheats — but refused to pay for the added work.