Tax Break

IRS budget: IT a priority, enforcement funding down

March 12, 2012

Commissioner of Internal Revenue Doug Shulman REUTERS/Hyungwon Kang

Remember the budget? Not the one President Barack Obama introduced last month. But the budget for fiscal 2012 – the year we’re in right now?

Don’t feel bad if you forgot. Obama signed the bill two days before Christmas, the same day that he signed the highly-politicized, media-frenzied payroll tax cut extension.

On March 6, the Congressional Research Service published a nice coda report detailing where the money will be spent through Sept. 30 2012.

Overall agency spending is down just $277 million to $44.41 billion from fiscal 2011 levels.

But the IRS’s budget was cut 2.5 percent. Enforcement, which makes up the bulk of IRS spending, was slashed 3.5 percent.

The only area of the IRS budget to see an increase was business systems modernization. This is an effort to bring IRS software into the 21st century with improved tax return processing as well as enforcement.

“When fully operational, the program will have several tangible benefits for taxpayers, including more timely account balance information and faster refunds to tens of millions of taxpayers who are due a refund each tax year,” the CRS report said.

But there have been software glitches and delays in the software upgrades for the current tax season.

Tax preparers are frustrated the IRS has delayed getting returns out to customers. For people living on a tight budget, the delays have kept them from paying bills.

Taxpayers will soon get a glimpse of how the upgrades are going at IRS. The budget also included a requirement that the IRS submit to Congress quarterly reports about its major information technology projects.

One last thing to note here. The Treasury Department keeps what’s called the “Treasury Forfeiture Fund.”

Congress and the president tapped this fund for $950 million in fiscal 2012 to meet government spending needs, up from $400 million in fiscal 2011.

The House of Representatives noted “the size of the Fund has grown rapidly in recent years because of ‘exceptionally large’ seizures of property and assets from criminal organizations.”

The House and Senate requested $630 million and $750 million from the fund in their initial budget requests. But with last minute Christmas shopping to do, why not go big?

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