Larry Gibbs was quoted regarding the state of the Internal Revenue Service (IRS) following President Obama signing $346 million in budget cuts for fiscal year 2015. Tax practitioners say they have not seen the IRS stretched as thin as it is now. "In 53 years, I've never seen anything like what is happening to our tax system over the last three of four years," Gibbs said. IRS Commissioner John Koskinen warned tax professionals to expect diminished services during filing season and possible shutdowns later this year. "We're now to the point where there is going to be less of everything. Less in the way to taxpayer services, less in the way of taxpayer compliance and enforcement simply because the bodies are not there. There are no more rabbits left in the hat."

One result of diminished IRS resources and a hiring freeze is that as experienced employees retire, younger inexperienced personnel are unable to take up the slack. "Over the past few years you've seen an exodus of your most experienced personnel at the IRS in the national office and in the field offices," Gibbs said. "That has a direct impact on administering tax laws, especially in lean time when workers need to go above and beyond their expected skill set." The IRS has rolled out a program meant to preserve internal knowledge by pairing young employees with seasoned veterans nearing retirement -- an approach that is crucial to maintaining the integrity of the IRS, he said.

Gibbs' remarks also appeared in BNA Transfer Pricing Report on January 20, 2015.