Tax News

CCH (cch.taxgroup.com) reports:

  The House Appropriations Committee on June 25 approved without any changes an IRS fiscal year (FY) 2009 budget of $11.4 billion, the same budget approved by the House Appropriations Subcommittee on Financial Services and General Government (TAXDAY, 2008/06/19, C.2). The budget includes $5.1 billion for enforcement, $2.2 billion for taxpayer service, and $223 million for business systems modernization. The appropriation is $304 million above the agency's FY 2008 budget and $37 million higher than the Bush administration request for FY 2009.

  The 2009 budget would "make it easier for honest Americans to file their taxes while it beefs up IRS enforcement to catch tax cheats," the committee said in a news release.

  The bill would eliminate funding for the IRS's use of private debt collectors. "The IRS can perform the same function at less cost and with better safeguards for taxpayers," the committee said. Subcommittee Chairman Jose Serrano, D-N.Y., commented that "under this very misguided and wasteful program, the IRS allows private contractors to collect unpaid taxes and to keep up to 24 percent of the tax revenue they bring in. This programs should be terminated."

  The overall IRS budget includes a $47 million increase for taxpayer service and return preparation, including IRS walk-in sites. Taxpayers receiving help at walk-in sites fell from 665,000 in 2003 to 406,000 in 2006, the committee noted. The budget also includes $192 million for the Taxpayer Advocate Service (TAS), a $15 million increase from FY 2008. From 2004 to 2006, taxpayers experienced long delays as the TAS's case load rose 43 percent while its staff declined by 7 percent, the committee pointed out.

  The bill also raises federal civilian pay by 3.9 percent for a cost-of-living adjustment and imposes a one-year moratorium on federal job outsourcing activities.

  By Brant Goldwyn, CCH News Staff