O'Neill: IRS budget fits bill

Treasury Secretary Paul O'Neill believes the Internal Revenue Service budget is about the right size, despite calls by the IRS Oversight Board that the tax agency needs additional money for modernization.

"In balancing competing priorities in the budget, the president has requested a sensible but significant 7 percent increase in funding for the IRS, which is nearly twice the average governmentwide increase," O'Neill said in a statement.

The Bush administration's fiscal 2002 budget proposes $397 million for the IRS Information Technology Investment Account. The board, however, says the IRS needs $1 billion over two years — $450 million in fiscal 2002 and $550 million in fiscal 2003.

"I am confident that the amount in the president's budget will allow the IRS to provide America's taxpayers with better quality service and help to enforce the tax law with integrity and fairness," O'Neill said.

The Treasury secretary's comments come in response to the IRS Oversight Board's 24-page analysis of the Bush budget request, which warned that the administration's budget "does not adequately support the IRS Strategic Plan and provides inadequate support for technology modernization."

IRS Oversight Board Chairman Larry Levitan has said that the reduced funds will delay the modernization of a broken system. "The impact of this reduction will be to slow down a critical program that is already taking too long," the board said in a statement.

Created under 1998 IRS reform legislation, the IRS Oversight Board was designed to act as a corporate board of directors for the IRS and to assist Congress with oversight responsibilities. This is the first year the board released an opinion on the IRS budget.

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