WASHINGTON (Reuters) - U.S. tax collections may
decline by $4 billion annually if the U.S. Congress cuts the
budget of the tax-collecting Internal Revenue Service,
according to a letter from the IRS commissioner on Monday.
In a letter to congressional tax-writing committees, IRS
Commissioner Douglas Shulman said steep IRS budget cuts would
sap revenue collections and hamper the agency's ability to
pursue identity theft, offshore tax evasion and other fraud.
The proposed spending cuts "will result in a direct
increase to the nation's deficit," Shulman said.
Enforcement budget pruning as proposed by Congress would
mean "that front-line IRS staffing levels must be substantially
reduced, leading to a measurable decrease of approximately $4
billion in revenue annually, or seven times the reduction in
IRS budget," he said.
Last month, a Senate subcommittee voted to cut IRS funding
for fiscal 2012 by $458.8 million. A House bill would fund the
IRS at $600 million below the fiscal 2011 level.
President Barack Obama's deficit reduction recommendations
called for more IRS funding estimated to bring in $3.2 billion
in additional tax revenues over 10 years.
(Reporting by Patrick Temple-West (202) 354-5841
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