Tax News

CCH (cch.taxgroup.com) reports:

  By a vote of 219 to 208, the House late on July 16 approved legislation providing an IRS budget of $12.1 billion for fiscal year (FY) 2010. Four Republicans joined 215 Democrats to vote for the bill; 38 Democrats joined 170 Republicans in voting against the bill. The IRS budget was included in the Financial Services and General Government Appropriations Bill, 2010 (HR 3170). The measure appropriates funds for the Treasury, the White House and executive offices, the judiciary and independent agencies.

  The IRS budget fully funds the Obama administration's budget request and is a $600-million increase over the IRS's FY 2009 budget. The proposed budget includes $5.5 billion for tax enforcement, an increase of $387 billion, and $2.27 billion for taxpayer services, a $19-million decrease that omits one-time costs to provide economic stimulus payments. The taxpayer services budget includes $206 million for the Taxpayer Advocate Service and $680 million for pre-filing taxpayer assistance and education.

  The IRS budget appropriates $4.1 billion for operations support, a 5-percent increase, and $253 million for business systems modernization, a 10-percent increase. The bill provides $149 million for the Treasury Inspector General for Tax Administration and $2 million for the IRS Oversight Board.

  The bill also directs the IRS to make a priority of improving and increasing staffing for taxpayer telephone help lines. The Appropriations Committee report (HRRepNo 111-202) encourages the IRS to continue efforts to ensure that its enforcement actions do not cause unnecessary problems for taxpayers facing economic difficulties. The report also directs the IRS to update the Taxpayer Assistance Blueprint within 90 days of the bill's enactment.

  The committee report noted a recent Government Accountability Office report identifying several information security weaknesses; the bill directs the IRS to institute procedures to safeguard the confidentiality of taxpayer information. The report also spotlights the IRS's plan to study paid tax preparers.

  The Obama administration issued a statement of administration policy (SAP) July 15 that applauded the bill's commitment to stepped-up tax enforcement and improved taxpayer service (TAXDAY, 2009/07/16, O.3). It said that IRS tax enforcement is a critical program supporting the administration's efforts to improve tax fairness and close the tax gap. The SAP estimated that IRS tax fraud efforts recoup $5 for every $1 spent.

  The Senate Appropriations Committee approved an IRS budget of $12.15 billion on July 9 (TAXDAY, 2009/07/10, C.3). The Senate is expected to take up the budget before Congress's August recess.

  By Brant Goldwyn, CCH News Staff

Tax-Related Sections of House Appropriations Committee Report on HR 3170, Financial Services and General Government Appropriations Bill, 2010, HRRepNo 111-202