IRS 2008 budget steps up tax services transformation

The IRS advances its goal to improve taxpayer service and tax compliance through IT in the fiscal 2008 Treasury Department budget. IRS plans to implement a Spanish version of the application that informs tax filers of the status of their refund and implement an estimated calling wait-time feature. The budget also will equip IRS employees with more tools to improve taxpayer service and enforcement as it migrates to an electronic environment.

The IRS Business Systems Modernization program gets a significant boost from the budget. The administration requests $282.1 million for the tax agency’s IT modernization, 43 percent more than the current 2007 continuing resolution of $96.8 million and the $242 million in 2006.

Still, the budget would provide $11.1 billion for IRS in 2008 compared with $10.4 billion in 2007 and $10.5 billion in 2006. The 2008 budget request is $546 million less than the $11.6 billion that the independent IRS Oversight Board proposed.

The budget increases by $409.5 million enhancements to IRS’ infrastructure, modernization, enforcement and taxpayer service programs that focus on bolstering tax compliance.

Of that, $143.1 million will go to IRS’ IT infrastructure, computer security incident response center and network infrastructure security, and Business Systems Modernization infrastructure. The IRS will continue progress on its modernization projects, such as the Customer Account Data Engine, its taxpayer database, Account Management Services and Modernized e-File for corporate electronic filing.

IRS expects to release the first version of the Account Management Services this summer to support real-time address change capability in CADE and faster processing for a number of math error notices. IRS will retire its Kennedy-era Individual Master File taxpayer database in 2012 and rely completely on CADE.

By 2010, IRS’ program investments are projected to increase annual enforcement revenue by $699 million annually.

IRS has encouraged taxpayers to electronically file, with 54 percent of individual returns and 550,000 corporate returns being filed electronically, according to this year's data.

IRS delivered the Filing and Payment Compliance first release, which analyzes tax collection cases and separates cases that require direct IRS involvement from simpler cases that private collection agencies can handle. The system identified and delivered the first 12,500 cases to three private collection agencies in September.

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