February 01, 2005
Statement of IRS Commissioner
Mark W. Everson on the FY 2006 Budget
The proposed 2006 budget makes a strong commitment to a sound system of tax administration. Overall, the budget calls for a 4.3 percent increase in the IRS budget, with a nearly 8 percent increase for enforcement.
Each year, the IRS collects $2 trillion, providing substantially all the revenues needed to run the government. The additional enforcement funding will be used to increase audits of corporations and high-income individuals as well as expand collection and criminal investigation efforts. These investments will pay for themselves several times over.
Last year, the IRS produced direct enforcement revenues of more than $43 billion from collection, audit and document-matching efforts. This reflects better than a 4-1 return for every dollar invested in the total agency budget. Increased enforcement funding makes good sense and contributes to deficit reduction.
The IRS will continue to make productivity gains and work to improve overall service to taxpayers. However, the budget calls for the IRS to do a modest amount of belt-tightening in the area of taxpayer services. We expect to make selected service cuts, including closing some taxpayer walk-in offices. These walk-in sites are relatively expensive and the number of visitors has dropped as use of the IRS Web site has dramatically increased.
The budget holds Business Systems Modernization funding steady at substantially the same level Congress approved last year. The IT modernization program has had a number of successes in the past year, including the first update to the main IRS database in 40 years, the roll-out of new Internet services for taxpayers and practitioners and improved administrative systems. The 2006 budget focuses resources on projects with direct impact on taxpayer service and enforcement efforts.
The request strongly supports a sound tax administration system, providing increased funding for the IRS when many domestic agencies face flat or reduced budgets.
I hope the Congress fully funds the President´s budget request for the IRS. It makes sense for both tax administration and deficit reduction.
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