Tax News

CCH (cch.taxgroup.com) reports:

  The House Appropriations Committee late on July 7 approved an IRS budget of $12.1 billion for fiscal year (FY) 2010. The proposed budget is a $600-million increase (5.2 percent) over the Service's FY 2009 budget and fully funds the administration's budget request. According to the committee's tentative schedule, the House will take up the financial services bill on July 17, including the IRS budget.

  The IRS budget provides an increase of $387 million for tax enforcement to $5.5 billion, Committee Chairman David R. Obey, D-Wis., reported in a written statement. "Among other things, the increase is for the administration's initiative to target wealthy individuals and businesses who avoid U.S. taxes by parking money in overseas tax havens," Obey indicated. "In enforcing our tax laws, we need to be sure we're going after the big fish as well as the little ones," Financial Services and General Government Subcommittee Chairman José E. Serrano, D-N.Y., said in a written statement.

  The budget provides $2.27 billion for taxpayer services, $4 million above the administration's request and $19 million below FY 2009, which included additional costs to make economic stimulus payments. The FY 2010 figure includes $680 million for prefiling assistance and education, an increase of $19 million, and $206 million for the IRS Taxpayer Advocate, an increase of $13 million.

  The proposed IRS appropriation also includes $4.1 billion for operations support, a 5-percent increase; $253 million for business systems modernization (BSM), a 10-percent increase, and $15 million for administering the health insurance tax credit. The bill "works to make it easier for honest Americans to file their taxes while it beefs up IRS enforcement to catch tax cheats," Obey said.

  The IRS Oversight Board on June 7 released a report to Congress that recommended an IRS budget of $12.5 billion for FY 2010 (TAXDAY, 2009/07/08, I.3). The Board's budget included $400 million for BSM, a $147-million increase over the administration request, to speed up the development of the IRS's information technology program to support the tax administration system. The Board also recommended a $184-million increase in IRS infrastructure initiatives and an additional $32 million for taxpayer service. It agreed with the administration's proposal for tax enforcement.

  By Brant Goldwyn, CCH News Staff