For '06, IRS enforcement cuts into modernization funding

For '06, IRS enforcement cuts into modernization funding

The IRS will reinvigorate enforcement this year and plans to apply $500 million of its budget next year to that end'at the expense of its systems modernization.

The Treasury Department's IT budget would rise to $2.3 billion from $2.25 billion, a 3.5 percent increase, under the fiscal 2006 proposal sent to Congress this week by President Bush. Treasury's total discretionary budget would increase to $11.6 billion, 3.8 percent over this year. Treasury plans to apply the bulk of its budget to the IRS, amounting to $10.7 billion for 2006, which is $443 million or 4.3 percent more than this year.

Enforcement funding will support more audits of corporations and high-income individuals and expand delinquent collections and criminal investigations, IRS commissioner Mark Everson said yesterday. The budget also will focus on projects with direct impact on taxpayer service, he said.

'The budget holds Business Systems Modernization funding steady at substantially the same level Congress approved last year,' Everson said. The IRS seeks $199 million for modernization next year, 2.1 percent less than this year's $203.4 million. For 2004, the IRS received $387.7 million for modernization.

The agency wants to spend $38.5 million on Collection Contract Support, compared with $5.1 million this year, to collect delinquent taxes. Some of this money would also go to the Filing and Payment Compliance project.

On the processing front, the IRS seeks $109.9 million for its new tax filer database next year, the same as this year. The service began processing a limited number of 1040EZ tax returns last year with the Customer Account Data Engine and expects to use it to process up to 2.5 million of the simplest returns this year with a new release of the database due in July from contractor Computer Sciences Corp. [see GCN story].

Because the IRS has fully deployed electronic services for tax professionals, banks and other third parties, the budget proposal whacks that funding from $46 million this year to $8.1 million.

In two non-IRS areas, the White House has requested $1.2 billion, up from $1.1 billion this year, for Treasury's IT infrastructure. The department is bringing its IT governance, performance, security and continuity planning, and management all under the Capital Planning and Investment Program

Finally, the budget proposal would reduce Treasury's funding for, the governmentwide transaction portal that provides electronic financial services to agencies, to $19.5 million from $20.4 million.

About the Author

Mary Mosquera is a reporter for Federal Computer Week.

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