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For immediate release
April 11, 2012
Joelle Jordan 202-288-3241

IRS Oversight Board Releases its FY2013 IRS Budget Report; Calls for Restoration of FY2012 Budget Reductions in Enforcement and Improved Service

(Washington, DC) The IRS Oversight Board released today its FY2013 IRS Budget Recommendation Special Report, calling for an FY2013 IRS budget of $13.034 billion, an increase of $1.218 billion over the enacted budget in FY2012 and an increase of $273.2 million over the President’s FY2013 budget request.

The Board recommends an increase over the FY2012 enacted budget to:

  • restore funding cuts made to IRS enforcement programs in the previous year’s budget;
  • fund taxpayer services so that an 80 percent level of service (LOS) on IRS toll-free telephone lines can be achieved;
  • fund programs and initiatives that represent investments in future performance gains; and
  • fund programs related to the implementation of the tax-related provisions of the Affordable Care Act.

The report states there has been a relatively slow, steady growth in IRS funding over the past decade, accompanied by improved performance by the tax agency on almost every measure. However, “During the past two years, but especially in FY2012, this pattern of steady growth has been broken.” The report adds that in addition to the Board itself, the IRS Commissioner and the National Taxpayer Advocate “have all warned Congress and the public about the dysfunctional consequences of such budget reductions, particularly in the form of reduced taxpayers service and lower tax revenue.”

The Oversight Board’s top two funding priorities are the restoration of audit and collection coverage lost in the FY2012 budget reductions, which the IRS estimates will result in an increase in enforcement revenue of $1.15 billion in direct revenue, and additional funding to increase the level of service (LOS) on IRS’ toll-free telephone lines from the 63 percent reflected in the President’s budget to 80 percent. Tax code complexity requires better service, so that taxpayers who want to do the right thing will have their questions answered and be more likely to file correct returns.

In addition, the Board recognizes the importance of Business Systems Modernization (BSM) funding, noting that in FY2012, despite significant cuts in the IRS’ overall budget, Congress increased BSM funding to levels consistent with those recommended by the Board. As a result, critical milestones have been met in the BSM program, the report states.

For the complete report, go to www.irsoversightboard.treas.gov/reports.

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Last Updated: April 11, 2012