Report: Budget cuts hurt tax collections by IRS

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WASHINGTON (AP) — A Treasury investigator says collections from delinquent taxpayers dropped for the second straight year in 2012, due in part to budget cuts at the Internal Revenue Service.

In 2011, enforcement revenue dropped by more than $2 billion. Last year, it dropped by $5 billion more, to a little more than $50 billion. At the same time, a new Treasury report says the IRS is opening more delinquent taxpayer accounts than it is closing.

The IRS has shed about 8,000 jobs since 2010. The report comes as the IRS is taking on big new responsibilities implementing President Barack Obama's new health care law, even as congressional Republicans want to cut the agency's budget even more.

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