Schumer & Clinton Urge Bush Administration to Reverse Decision to Close Taxpayer Assistance Centers

Schumer & Clinton Urge Bush Administration to Reverse Decision to Close Taxpayer Assistance Centers

Closures Would Hurt Low Income New Yorkers, Widen Tax Gap

Washington, DC - Senators Charles Schumer (NY) and Hillary Rodham Clinton (NY) today called on Secretary of Treasury John Snow to reverse a Bush administration decision to close seven Taxpayer Assistance Centers in New York. The Senators noted that while the Bush administration's tax cuts have made the tax code even more beneficial to wealthy Americans who can afford to hire accountants, the Administration is shutting down one of the few avenues for free tax assistance available to low income New Yorkers. Schumer and Clinton also emphasized that the closures will contribute to the increasing gap between taxes owed and paid, which already exceeds $300 billion per year.

"A complicated tax code creates many questions by taxpayers. Low-income and middle-class New Yorkers will bear the brunt of the Administration's inability to provide the necessary answers to questions they have about paying their taxes. Plain and simple, closing nearly one-third of New York's IRS help centers is wrong," said Senator Schumer.

"This shortsighted decision will only make it harder for many New Yorkers -- particularly seniors, low-income taxpayers, and those facing language barriers -- to receive the face-to-face assistance and guidance they need to navigate a tax code that is already too complicated," said Senator Clinton.

Schumer and Clinton underscored that this plan will contribute to what is already a serious decline in national tax compliance and increasing tax gap, which by the IRS' own estimate exceeds over $300 billion per year in taxes owed, but not collected. Moreover, the comprehensive tax law changes proposed by the Administration over the last four years have exponentially added to the complexity of the tax code.

"At a time when the Administration should be devoting more resources to tax compliance to reduce the tax gap and to help taxpayers comply with the new complexities of the tax code, it is doing exactly the opposite by closing these tax assistance centers," Schumer and Clinton emphasized.

The IRS has announced that seven Taxpayer Assistance Centers in New York will close by this fall, and that 68 total will close across the country. The seven centers are located in Manhattan, Brooklyn, the Bronx, Hauppauge, Kingston, West Nyack and Albany. According to the IRS, 81 jobs will be eliminated at these New York centers as a result of the closures.

The text of the letter from Senators Schumer and Clinton to Secretary Snow follows.

May 27, 2005

The Honorable John Snow
Secretary
U.S. Department of Treasury
1500 Pennsylvania Avenue, NW
Washington, D.C. 20220

Dear Secretary Snow:

We are writing to express our deep disappointment at today's announcement by the Internal Revenue Service (IRS) that it is planning to close seven IRS Taxpayer Assistance Centers (TAC's) in New York State. We understand the seven sites set to be closed by this fall are located in Brooklyn, Manhattan, the Bronx, Hauppauge, Kingston, West Nyack and Albany. The IRS estimates that 81 positions at these centers will be eliminated as a result of the closures.

We are aware of the budgetary pressures the Internal Revenue Service (IRS) faces, and we strongly believe that Congress should provide your department as well as the IRS with the resources to enhance enforcement activities and customer service at the same time that it adds to its capacity to handle other priorities. Indeed, we are encouraged by Commissioner Everson's efforts to crack down on abusive tax shelters as they will go a long way towards ensuring greater compliance. However, at a time when the tax laws enacted over the last several years have made the tax code as complex as ever and when the "tax gap" is well over $300 billion, it is shortsighted to be making cuts to a program designed to help ordinary citizens file their taxes.

We believe these cuts in customer service positions are likely to be counterproductive for our constituents. We are concerned that these closures will only make it harder for ordinary New Yorkers to receive essential in-person assistance. Commissioner Everson's letter to us states that IRS has "seen a significant shift in the ways Americans interact with the IRS. Compared to the past, fewer taxpayers are choosing to write or call us; even fewer taxpayers are using our walk-in TACs. Instead, more and more Americans are using our electronic services, especially our internet site." While we understand that many Americans are increasingly proficient with electronic services, we are very concerned for those who may not have the requisite level of familiarity, knowledge, or economic means to file their taxes without assistance. Those hardest hit by the decision to close the TAC's may be seniors, low-income taxpayers, and taxpayers facing language barriers.

We appreciate Commissioner Everson's offer to meet with us to discuss the closures further and his letter to us includes an outline of the model used to determine which facilities to close. We would appreciate receiving a briefing and detailed explanation of the model, and how it was applied to by the IRS to select these seven New York sites for closure.

Thank you for your attention to this issue and we look forward to your prompt response.

http://clinton.senate.gov/~clinton/news/2005/2005527A23.html