As sequestration continues to take effect, the mainstream media is reporting claims of devastation among federal agencies. On Tuesday, CNN highlighted how the IRS’ budget cuts are allegedly harming the agency’s ability to conduct its duties properly:
Budget cuts at the Internal Revenue Service are causing long lines for the poor and elderly seeking free tax preparation advice, lengthier hold times for IRS help line calls and delays in tax refunds for identify theft victims.
With a hiring freeze preventing the IRS from replacing workers who retire or leave for other jobs, existing staffers say they’re feeling the pressure of lack of manpower, according to the National Treasury Employees Union, which represents federal employees at the tax collection agency.
The IRS has lost 10,000 employees to attrition in just the past two years, or over 9% of its total workforce.
This all sounds pretty terrible. Worse customer service for the poor and elderly, phone lines are being jammed – why, sequestration must be awful over at the IRS. Never mind some important clarifying facts the article never mentions:
First, the survey itself is not scientific. It asks participants via e-mail to send responses, which opens the results up to selection bias – in other words, as opposed to a scientific poll, it does not look at employee opinions across the spectrum of opinions. People who are more likely to participate in the survey are those who either really like what’s going on, or really do not. As such, the poll’s numbers are automatically suspect.
Furthermore, according to the union’s website, which published the survey in February, 2,200 responses were received. While this is normally a statistically significant number, selection bias largely nullifies that. Furthermore, the survey says the union’s “membership” was surveyed, which is 150,000 employees…but the union’s website describes itself as representing “150,000 employees in 31 agencies and departments.” The IRS has about 90,000 employees, which means 60,000 people may have received the survey who are not part of the IRS’ workforce.
The head of the union testified to a House Subcommittee on Tuesday that sequestration was harming the IRS’ ability to do its job, and that the agency’s number of employees had dropped 20% in the last two decades. While this number is accurate, according to historical IRS data, it is also misleading. Using that data, consider:
- Between 1986 and 1992, the IRS staff jumped from 96,000 to nearly 117,000. Coming down from a historical peak, which is what the union testimony used as a starting point, is not the same as coming down from a longtime average. Staffing has been largely stable since 2007, alternating between over 90,000 employees to nearly 95,000.
- Accounting for inflation, the IRS’ budget has grown enormously since 2001. Back then, its budget was approximately $8.77 billion. If it had grown at the pace of inflation, it would have been $11.371 billion in 2012. Instead, even after budget cuts the union decried, it was over $12 billion – nearly $700 million larger in constant dollars, a growth of nearly 6% above inflation over that time.
- Despite the larger budget, the IRS had over 7,000 fewer employees. Where is all that extra money going? Large salaries?
- Including sequestration, the union’s chief says the budget has dropped nearly $1 billion in the last two years. This is accurate. But this is merely a drop of about 8% in the IRS’ total budget two years ago, which was over $12 billion.
- While the increasing complexity of the tax system is likely adding to the IRS’ workload – special interest tax credits, etc. – the IRS didn’t have millions of Americans relying on TurboTax and other private-sector resources for tax assistance until relatively recently.
One final critique: The article claims “the situation could only get worse” at the IRS. This is demonstrably untrue. Consider the simple fact that changing the current system to one consisting only of a flat income tax or a national sales tax would eliminate most or all of the IRS’ current responsibilities, making the situation much, much better.
Check back tomorrow for Part II of our fact-check of the survey, where we’ll delve into the survey results themselves.