Oversight board criticizes proposed IRS budget

The Bush administration's proposed budget for the Internal Revenue Service does not provide enough money to modernize technology, according to the IRS Oversight Board. In an interim report released by the oversight board Thursday, the group recommended an 8.9 percent increase over the administration's proposed figure of $9.4 billion for the IRS in fiscal 2002. "The administration's 2002 budget does not adequately support the IRS strategic plan and provides inadequate support for technology modernization," the report said. The report called for an overall IRS budget of $10.2 billion, including $450 million for information technology investments in 2002, compared with the administration's proposed $397 million. The IRS' Information Technology Investment Account (ITIA) was created in 1999 to provide a consistent level of funding to support long-term IT projects. Board members called on Congress to allocate a total of $1 billion for the account over the next two fiscal years, with $550 million earmarked for fiscal 2003. "The IRS Oversight Board is concerned that for the first time, the ITIA will have a zero balance by the end of fiscal 2001. This is a dangerous situation that could result in projects being inefficiently stopped and started or unnecessarily slowed down," said the report.

By law, the oversight board's report goes to Congress along with the administration's budget proposal. The nine-member board, which includes six members from the private sector, was established by the 1998 IRS Restructuring and Reform Act. The board oversees agency operations, recommends candidates to be IRS commissioners and advises the President when it feels a commissioner should be fired. The group is required to report annually to the President and Congress on its findings and recommendations. During its first public meeting in March, the board said the agency needs a fiscal 2002 budget of more than $10 billion to sustain its modernization effort, increase compliance rates and improve customer service. Witnesses and board members voiced concern over the agency's antiquated business systems, a decline in tax audits during fiscal 2000 and staff shortages. The report also recommended $54 million to upgrade desktop and laptop computers to support new software. The President's budget does not include any funding for this program. National Treasury Employees Union President Colleen M. Kelley said the administration's budget is damaging to IRS employees. "Just as we feared, the administration's proposal shortchanges both the IRS and its employees, at the same time that extraordinary and changing demands are being placed on both," said Kelley. During the 1990s, staffing levels at the IRS dropped by 17,000 employees, while the number of tax returns grew by 8 percent. The board proposed fully funding the Staffing Tax Administration for Balance and Equity program, which would enable the IRS to hire about 3,800 new employees to improve service and enforcement. Bush's budget slows the program down in 2002, providing for only 2,500 new employees. Kelley said the power to boost funding for the IRS now lies with Congress. "We will find out in the appropriations process how serious Congress is about remaking the IRS," said Kelley.

In December, leaders of appropriations committees on Capitol Hill agreed to release $200 million to help the agency complete its modernization program.

Stay up-to-date with federal news alerts and analysis — Sign up for GovExec's email newsletters.
Close [ x ] More from GovExec

Thank you for subscribing to newsletters from GovExec.com.
We think these reports might interest you:

  • Sponsored by G Suite

    Cross-Agency Teamwork, Anytime and Anywhere

    Dan McCrae, director of IT service delivery division, National Oceanic and Atmospheric Administration (NOAA)

  • Data-Centric Security vs. Database-Level Security

    Database-level encryption had its origins in the 1990s and early 2000s in response to very basic risks which largely revolved around the theft of servers, backup tapes and other physical-layer assets. As noted in Verizon’s 2014, Data Breach Investigations Report (DBIR)1, threats today are far more advanced and dangerous.

  • Sponsored by One Identity

    One Nation Under Guard: Securing User Identities Across State and Local Government

    In 2016, the government can expect even more sophisticated threats on the horizon, making it all the more imperative that agencies enforce proper identity and access management (IAM) practices. In order to better measure the current state of IAM at the state and local level, Government Business Council (GBC) conducted an in-depth research study of state and local employees.

  • Sponsored by Aquilent

    The Next Federal Evolution of Cloud

    This GBC report explains the evolution of cloud computing in federal government, and provides an outlook for the future of the cloud in government IT.

  • Sponsored by LTC Partners, administrators of the Federal Long Term Care Insurance Program

    Approaching the Brink of Federal Retirement

    Approximately 10,000 baby boomers are reaching retirement age per day, and a growing number of federal employees are preparing themselves for the next chapter of their lives. Learn how to tackle the challenges that today's workforce faces in laying the groundwork for a smooth and secure retirement.

  • Sponsored by Hewlett Packard Enterprise

    Cyber Defense 101: Arming the Next Generation of Government Employees

    Read this issue brief to learn about the sector's most potent challenges in the new cyber landscape and how government organizations are building a robust, threat-aware infrastructure

  • Sponsored by Aquilent

    GBC Issue Brief: Cultivating Digital Services in the Federal Landscape

    Read this GBC issue brief to learn more about the current state of digital services in the government, and how key players are pushing enhancements towards a user-centric approach.


When you download a report, your information may be shared with the underwriters of that document.