This testimony discusses the administration's fiscal year 2000 budget
request for the Internal Revenue Service (IRS) and the status of the
1999 tax filing season. For next year, the administration is requesting
$8.2 billion and nearly 98,000 full-time equivalent positions for
IRS--about the same as for fiscal year 1999. Even so, there are
differences in how IRS plans to spend its fiscal year 2000 funds. For
example, the request includes about $197 million for three critical
initiatives--organizational modernization, implementation of the IRS
Restructuring and Reform Act of 1998, and customer service training.
IRS' current five-year cost estimate to make its information systems
Year 2000 compliant is $1.3 billion--$345 million higher than its
estimate a year ago. IRS is requesting $1.46 billion for information
systems in fiscal year 2000. IRS' plans for spending those funds are
consistent with earlier GAO recommendations and congressional direction.
For fiscal year 2001, IRS is also asking for an advance appropriation of
$325 million for its multi-year capital account for systems
modernization. The agency has not adequately justified that request in
accordance with federal information technology investment requirements.
With respect to the 1999 filing season, GAO found that the accessibility
and quality of IRS' telephone service has deteriorated considerably
since last year; the number of individual income tax returns filed
electronically continues to rise, although fewer returns are being filed
by telephone; many taxpayers have made mistakes with the new child tax
credit; and many systems for processing returns and remittances have
been doing a good job.
Click here for the full GAO Report, PDF Version, 36pgs. 140K