WASHINGTON (AP) - A government watchdog says the Internal Revenue Service can't fully handle identity theft cases and fraudulent tax refund claims or adequately answer taxpayers' questions because its budget is too small to deal with its growing workload.
A report by national taxpayer advocate Nina E. Olson says that last year the IRS identity theft caseload grew by 20 percent to more than 226,000. She says the number of tax returns the agency decided needed additional screening for possible fraud exceeded 1 million, a 72 percent increase over 2010.
Olson says Congress should give the IRS enough money to perform properly. This year's agency budget is $11.8 billion. That's $300 million less than last year.
The taxpayer advocate is an independent watchdog within the IRS that reports annually on the agency's performance.