As completed federal income tax forms filled out by millions of Americans — or their paid tax preparers — head to the Internal Revenue Service this week for processing, the tax collection agency is underfunded, understaffed and scrambling to keep up with a federal tax code made increasingly complex by Congress.

While it’s popular to bash the IRS, much of the criticism is misdirected. The IRS has sometimes provided poor customer service and been heavy-handed, but underfunding the agency, which congressional Republicans have done, is a mistake.

The IRS is perhaps the only federal agency that is a profit center. Additional staff in other departments of the federal government just adds to the federal budget deficit. Adding IRS employees brings in more tax money to the Treasury.

With an estimated $385 billion annual collection shortfall, known as the tax gap, Congress should be increasing IRS funding instead of cutting it. An internal IRS report found that every dollar of additional funding for the tax-collection agency produces a $200 increase in tax collections.

While the IRS collected $2.3 trillion last year, the tax gap means that $385 billion went uncollected. The reasons include simple cheating, honest mistakes, as well as sophisticated tax dodges and other kinds ot tax fraud. For every dollar of the tax gap, honest taxpayers are paying more.

Not only must the IRS deal with an overly complex tax code that saw 4,430 changes implemented by Congress from 2001 to 2010, it also must try to catch cheating that has become increasingly common. Last year, the fraud division at the IRS flagged 1 million returns as possibly fraudulent — a jump of 72 percent over the number of returns flagged in 2010.

It’s hard to understand what Republicans in Congress had in mind when they pushed through a budget cut for the IRS when an additional dollar in the IRS budget brings in more money to the U.S. Treasury. The latest IRS budget cut forced the agency to offer buyouts to 5,400 of its 95,000 employees.

Expecting spending reductions across the entire federal government makes sense at a time of massive budget deficits. But the IRS is the exception among government departments and agencies — it collects money and works to enforce compliance. Cutting $300 million out of the $12.1 billion IRS budget was a mistake, and Congress should understand that and agree to boost IRS staffing to close the tax gap, increase compliance and fraud detection — while bringing in more money to the Treasury to reduce the deficit.

Every honest taxpayer should want to see the IRS funding increased because that is likely to boost collections, reduce the tax gap and increase the number of tax cheats caught, which should deter future cheating. For every dollar of tax revenue lost due to cheating, offshore tax havens, small business ownners exaggerating expenses or underreporting income, honest taxpayers have to pay more.

Not only does the IRS need more auditors and fraud investigators, it also needs smart people. Increasingly complex tax returns and sophisticated tax avoidance schemes require that the IRS have people smart enough to understand and catch tax fraud and cheating.

The current debate over tax reform often refers to fairness. And most Americans do support ending the Bush tax cuts for the wealthy and also eliminating at least some loopholes and exemptions.

But fairness also means that people should pay the taxes that they owe, and increasing funding to the IRS would increase fairness by tracking down more tax cheats while also closing the tax gap and easing the burden on honest taxpayers.