Tax News

CCH (cch.taxgroup.com) reports:

The Senate Appropriations Committee on July 12 approved an IRS budget of $11.1 billion for fiscal year (FY) 2008. The budget was approved as part of HR 2829, the Financial Services and General Government Appropriations legislation. HR 2829
was approved 15 to 14 on a straight party-line vote, because of controversy over the funding of the Office of the Vice President. The committee subsequently restored funding for the Vice President's office.
The bill retains a controversial provision to limit funding for the IRS's private collection of tax debts, effectively ending the program if adopted by Congress. The IRS would be allowed to continue the initiative, but new funding would be capped at $1 million, an amount considered inadequate to maintain the program. The House version of the bill does not place any limits on private tax collectors.
The IRS budget of $11.1 billion is $112.5 million above the president's budget request and $544.5 over the FY 2007 level. It includes $6.8 billion for enforcement, $2.1 billion for taxpayer service, and $282 million for business systems modernization. The taxpayer service appropriation is $46.1 million above the president's request.
Federal employees would receive a cost-of-living pay raise of 3.5 percent, an increase over the three percent requested by the Bush administration. The House bill has a comparable provision.
By Brant Goldwyn, CCH News Staff