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IRS paid $20 million to collect $6.7 million in tax debts

IRS paid $20 million to collect $6.7 million in tax debts

The IRS also reminds taxpayers that they should keep copies of their prior-year tax returns for at least three years.

"The IRS strongly encourages people to file their tax returns electronically for faster refunds", the US tax agency said in a statement.

According to the plea agreement, John's motive was to build and maintain a reputation for getting large refunds to increase his client base, which would generate more fees.

As if it wasn't already clear that the IRS faces challenges in implementing the new GOP tax law, a new report by the agency's independent taxpayer advocate warns just how daunting a task the agency has on its hands.

"Olson noted that funding for the IRS has fallen since 2010 by about 20 percent, in inflation-adjusted terms, and these "cuts have rendered the IRS unable to provide acceptable levels of taxpayer service", adding that "'shortcuts" have become the norm and "shortcuts' are incompatible with high-quality tax administration". "It cannot answer the phone calls it now receives, much less the phone calls it can expect to receive in light of tax reform, without adequate funding".

The IRS has estimated it will need some $495 million in the next two fiscal years to implement the law, which will include programming and systems updates, answering calls, revising regulations, and training employees, Ms. Olson wrote.

Despite the pointed failure of similar efforts in the past, Congress passed a law in 2015 requiring the IRS to use outside contractors to make a dent in the $138 billion that taxpayers owe the government.

It's not clear, however, how willing the Republican-controlled Congress will be to augment the agency's budget. But Olson also wrote that the IRS has opportunities to improve even without more money.

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