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IRS Oversight Board

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IRS Oversight Board Calls for Additional FY2012 Funding for IRS BSM, Taxpayer Service, and ACA Implementation

(Washington, DC) The IRS Oversight Board released a special report today making recommendations for the IRS Fiscal Year 2012 budget. The report calls for an increase of $1.2 billion over the FY2010 enacted IRS budget, an increase of $709 million over President Obama’s FY2011 IRS budget request. Currently, the IRS is being funded at FY2010 levels under a Continuing Resolution. The Oversight Board‘s recommendation is approximately $59 million more than the President requested for FY2012; a difference of 0.4 percent.

The Board’s FY2012 recommendation is substantially higher than those made in the IRS FY2010 and FY2011 budget recommendations due to the cost to implement provisions of the Patient Protection and Affordable Care Act (ACA), which totals $473 million in the Board’s FY2012 IRS budget recommendation.

The Board’s foremost priority within its FY2012 budget recommendation is the $333.6 million in total funding recommended for the Business Systems Modernization (BSM) account, along with an associated $52 million within the Operations Support account for information technology infrastructure to support ongoing BSM maintenance.

“The Board assigns top budget priority to BSM funding primarily because of the critical role these resources will play in modernizing the core taxpayer account system for individual taxpayers under the Customer Account Data Engine 2 program. With the recommended funding, the CADE 2 program is poised to delivery daily account processing by the 2012 filing season, a major milestone in the IRS BSM effort that will yield tangible benefits, such as quicker refunds, to tens of millions of taxpayers,” the report states.

The Board’s second highest priority is funding of taxpayer service that allows for the restoration of an 80 percent level of service on IRS toll-free telephone assistance during FY2012. The Board believes that additional funding is needed to improve toll-free service, as major changes to the tax laws in recent years have contributed to a substantial increase in the number of calls to the IRS and a corresponding drop in the level of service. The Board notes that it foresees a greater demand for toll-free assistance in the coming years, driven by a proliferation of new tax provisions.

In addition, the Board’s IRS budget recommendation acknowledges the wide range of new responsibilities under the ACA, such as the administration of new tax credits for individuals and businesses, and additional information reporting.

The IRS Oversight Board FY2012 IRS Budget Recommendation Special Report is available at www.irsoversightboard.treas.gov.

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