Senate Spending Committee Boosts IRS Enforcement Budget

by Mike Godfrey, Tax-News.com, Washington

12 July 2007

A Senate appropriations subcommittee has approved a $21.8 billion spending bill that involves another increase in funding for the Internal Revenue Service and the agency's enforcement initiatives.

The Senate Financial Services and General Government Appropriations Subcommittee on Tuesday approved fiscal 2008 legislation that would give the IRS a budget of $11.1 billion, $544.5 million over the FY 2007 enacted level, and $112.5 million over President Bush's budget request.

The subcommittee also approved a further $6.8 billion to bolster the IRS's enforcement budget, which it said would be used to identify unreported, underreported, and unpaid taxes owed, crack down on tax cheats through criminal investigations, conduct audits, and collect delinquent taxes. This was equal to the President’s budget request.

A further $282 million has been granted to the IRS Business Systems Modernization effort, $69.4 million above FY 2007, to progress toward migrating to state-of-the-art information technology and enhance overall efficiency at the IRS.

The subcommittee approved $2.1 billion to strengthen taxpayer services and advocacy with the aim of promoting more accurate and timely tax filing. This was $11 million above FY 2007, and $46.1 million above the President’s request.

A more controversial measure sees the bill attempting to restrict funding of the IRS's private tax debt collection program by imposing a $1 million limit on new funding for the program in FY 2008. A similar proposal was removed from the House version of the IRS budget after a procedural challenge from Republicans.

Under the bill, the Treasury Department will get $12.25 billion, $623.9 million over FY 2007, and $112.5 million over the President’s budget request. The bill also provides $6.3 billion in funding for the Federal Judiciary (both mandatory and discretionary), $357.5 million over FY 2007 and $174.3 million below the President’s budget request. Meanwhile, the Securities and Exchange Commission will get an additional $12.7 million in 2008 on top of its $905.3 million budget approved in 2007.

“This bill is the most transparent appropriations bill, covering our jurisdiction, in the history of the United States," claimed Sen. Richard Durbin of Illinois, Chairman of the Financial Services and General Government Appropriations Subcommittee. "We’ve made tough decisions, with tight funds, in the face of many worthy demands, and I’m proud of the bill we’ve crafted."

“This bill represents an important step forward in the effort to improve government services for the American people," added Sen Robert C. Byrd of West Virginia, Chairman of the Senate Appropriations Committee. "This legislation funds key priorities, including: improving services for taxpayers, community development, supporting small businesses, and strengthening the judicial system."

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