The Internal Revenue Service chief told
lawmakers Monday the tax agency needs a budget increase of nearly
10 percent to halt a steep decline in audits and continue
modernizing ancient IRS computers.
"We have to both do the modernization and enforce the tax
law," IRS Commissioner Charles Rossotti told a House Government
Reform subcommittee. "We have half the number of audits we had
three years ago. We're really risking the entire tax system."
The IRS commissioner's appearance came one week before this
year's April 17 income tax filing deadline, a week the
Republican-led Congress traditionally use for symbol and substance.
This year will see a symbolic vote on scrapping the tax code and
serious consideration of a 10-year, $248 billion income tax cut for
The IRS is asking Congress for about $8.8 billion in fiscal 2001
an increase of $769 million over last year's budget. Some of it
is meant to hire almost 2,000 more people to beef up enforcement of
tax laws and improve service to taxpayers. The agency also wants
$119 million to continue the long-term task of replacing its
1960s-era main computer systems.
Without endorsing the budget request, Rep. Stephen Horn, the
subcommittee chairman, said lawmakers are concerned that
taxpayer-friendly reforms enacted in 1998 coupled with a reduced
IRS work force has contributed to a decline in enforcement. Horn,
R-Calif., said taxpayers now owe $231 billion in overdue taxes and
"Some people are now concerned that the agency has become so
user-friendly that it isn't collecting enough of the tax money it
is owed," Horn said.
Still, the IRS will collect a lot: Rossotti said net tax
collections should top $1.6 trillion this year. About 127 million
individual tax returns will be filed this year; as of April 2, the
agency had received about 70.1 million.
As Americans rush to finish their returns, Republicans in
Congress plan to keep focused on cutting taxes and tax reform, two
of their signature issues. Highlights include:
Votes in the Senate on legislation cutting income taxes for
millions of married couples, including the 25 million who now pay
more than they would if single. The bill also would permanently
ensure that taxpayers could claim personal credits such as the
$500-a-child tax credit without running afoul of the complex
alternative minimum tax.
Another Senate vote on whether to debate a bill pushed by
Majority Leader Trent Lott, R-Miss., that would roll back 4.3 cents
of the federal per-gallon gas tax through the rest of the year. The
bill, which faces long odds, would suspend the entire 18.4-cent tax
if average prices topped $2 a gallon at the pump.
House consideration of legislation costing $2.1 billion over
five years that would expand taxpayer rights and give people new
breaks on IRS penalties and interest. The House also plans symbolic
votes on measures that would sunset the tax code in five years and
a proposed constitutional amendment requiring a two-thirds vote of
Congress to enact most tax increases.
Three days of hearings at the House Ways and Means Committee on
alternatives to the income tax, including a flat tax and a national
sales tax. The panel's chairman, Texas Republican Bill Archer, has
long advocated scrapping the income tax but is retiring before such
a major change could become law.
Senate Commerce Committee consideration of a bill to extend a
moratorium on new Internet taxes by five years, sponsored by the
panel's chairman, Arizona Republican John McCain. A federal
commission chaired by Gov. Jim Gilmore, R-Va., also will formally
present its majority report recommending that extension, as well as
repeal of the 3 percent telephone tax and a permanent ban on
Internet access taxes.