The Treasury Inspector General for Tax Administration produce a report on trends in compliance activities through 2012. The report states:

“During Fiscal Years 2011 and 2012, the Internal Revenue Service encountered challenges that included administering recent legislative changes within an environment of decreasing resources. For example, approximately 50 of the 500 Affordable Care Act provisions add to or amend the Internal Revenue Code. At the same time, the IRS operated under a continuing resolution for Fiscal Year 2012 that funded it at a little more than $11.8 billion, which is a 2.7 percent reduction since Fiscal Year 2010.”

We all know that many Revenue or Collections Agents and Officers can appear over zealous but there are good and bad people in all walks of life. My heart really goes out to some of these people working at the IRS as the report goes on to state, “Since Fiscal Year 2010, approximately 8,000 full-time IRS positions have been lost—about 5,000 from front‑line enforcement personnel. In addition to offering early retirements and buyouts, IRS records indicate that more than one-third of executives and nearly 20 percent of non-executive managers are currently eligible for retirement.”

As a result the report concludes that, “Enforcement revenue collected declined by 9 percent in Fiscal Year 2012, from $55.2 billion to $50.2 billion. This has decreased in two straight years and is 13 percent less than the $57.6 billion collected in Fiscal Year 2010. The 13 percent reduction in enforcement revenue correlates to the 14 percent reduction in the number of enforcement personnel.”

In my humble opinion this is hugely monumental as the US Fed is printing $85 BILLION PER MONTH to artificially support the bond market on the hopes that the US economy doesn’t sink into a recession. The best part is that the general masses have been so programmed to accept this troublesome divergence from economic reality that no one is able to see or say that indeed ‘the emperor is wearing no clothes’ and soon I fear we will become a nation of nudists. As in we will have nothing.

Not all is necessarily bad though as the “IRS Collection function activities showed mixed results for Fiscal Year 2012. For the third straight year, revenue collected on Taxpayer Delinquent Accounts by the IRS Collection Field function increased.” So they are getting more efficiency out of their field officer.

However, “Collections by the Automated Collection System declined for the first time in four years. (and) The IRS continues to receive more new Taxpayer Delinquent Accounts than it closes. The amount owed in the Queue increased 22 percent in Fiscal Year 2011 ($56.2 billion) and 12 percent in Fiscal Year 2012 ($63.1 billion) and has grown 46 percent over the past five years. The Examination function’s recent decrease in revenue agents and tax compliance officers contributed to an overall decrease in examinations. This reduction is attributable to decreased examinations of individual tax returns. The number of corporate, partnership, and S corporation examinations increased during Fiscal Years 2011 and 2012. The no‑change rates for examinations of individual income tax returns by revenue agents in Fiscal Year 2012 was 11 percent but remained lower than the no‑change rates reported in Fiscal Year 2008.”

Basically as an organization the IRS is being squeezed for efficiency to the point of becoming crippled which is not necessarily a good thing as we rely on these public servants to sustain the efficacy of our tax system. No recommendations were made as a result of this report but those of us who work in this field all see the merits in properly funding this agency. Just one simple man’s opinion.

In accordance with Circular 230 Disclosure