IRS fighting for 2010 funding in 2017

Computer tower with its side panel removed

Over two days of hearings, the embattled IRS Commissioner John Koskinen pledged that taxpayer service, enforcement and the agency's cybersecurity position would all improve, if only Congress would give him as much money as his predecessors got.

"Over seven years, we have been held flat," Koskinen testified before the House Appropriations Committee Feb. 11.

Promising to collect an additional $46 billion in owed taxes if the IRS gets its FY2017 budget request (which includes $343 million for IT modernization), Koskinen stressed the relative modesty of his agency's $12.3 billion request. The funding levels sought "would take us back to 2010," Koskinen said, adding that he's fairly sure his is the only government agency begging to be restored to the funding level it had seven years prior.

Testifying before the Senate Finance Committee on Feb. 10, Koskinen said that even with limited funding, the IRS beats out the rest of the developed world in tax-collection efficiency.

"The average OECD member country spends $8.87 to collect $1,000 of revenue, while the U.S. spends only $4.70," he said.

Lawmakers split along partisan lines in their assessment of the FY2017 request.

Rep. Ander Crenshaw (R-Fla.) deemed the 9.3 percent increase over last year "not quite as excessive" as previous, congressionally denied requests, while Rep. Jose Serrano (D-N.Y.) hounded his colleagues for choking off IRS funding and pointed to the recent omnibus bill.

The $290 million in dedicated cybersecurity, taxpayer service and fraud prevention funding in the 2016 omnibus appropriations bill, Serrano said, was a financial Band-Aid on the deeper cuts.  

"The omnibus funding increase was a down payment on the investments the IRS needs to succeed," Serrano said.

Koskinen said that $178 million of that $290 million would be spent on taxpayer services, while $95 million would go to cybersecurity.

The investment has already paid off, he said, crediting the additional dollars for a revamp of the IRS' fraud-detection filters, which in turn helped the IRS detect and halt a bot attack last month.

IRS Director of Strategic Planning and Technical Direction Nitin Naik, meanwhile, said at a Feb. 9 technology conference that the central question facing the agency is, "Can we maintain our level of infrastructure with the budget we are getting?"

His answer is that mainframes and other legacy systems supporting applications like the Individual Master File work well at present. A shift to the cloud for savings purposes isn't in the cards just yet for the IRS, for security reasons. "We need some additional controls," beyond FedRAMP certification, Naik said. The current posture with regard to modernization is that it doesn't make sense to upgrade legacy tech in a time of budget uncertainty, he added. What the IRS has now " works, and not many people want to risk changing that," Naik said.

The FY2017 budget request, if enacted, would build on all aspects of customer service and cybersecurity, and would include such Congress-pleasing moves as $17 million for a modernized e-discovery system.  Such a system, Koskinen said, would help ensure IRS hard drives aren't accidentally wiped while the data on them is needed for an investigation. The move is designed to prevent a recurrance of lost data, as happened in a congressional investigation of IRS practices in granting tax-exempt status to ideological groups.

"In the meantime, nobody's wiping anything," Koskinen pledged. "We're collecting the data off of it and saving it."

About the Author

Zach Noble is a former FCW staff writer.


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