Treasury IT spending could fall

The Treasury Department, normally known as one of the federal government's biggest spenders on information technology, would take a hit under the president's 2005 budget request.

Although Treasury's proposed IT budget of $2.7 billion is down 3.5 percent from last year's request, it includes $128 million — it would be an increase of $14 million compared with last year's $113.5 million request — for development of a new taxpayer database, a critical component of the Internal Revenue Service's business systems modernization plan. Treasury is asking for at least $285 million for the overall modernization program, down from last year's request of $429 million.

Included in the overall Treasury budget proposal is $15.6 million for maintaining the agency's 1960s-era individual taxpayer database.

For the IRS' modernized e-filing program, the budget earmarks $58.9 million, down from $73.9 million last year. But at least two updated electronic-filing systems will be finished and ready for corporations and nonprofit organizations to use this month, IRS officials said in January. With the new systems, tax filers can use the Web from a secure broadband connection to file Form 1120 corporate income tax forms and Form 990 tax-exempt returns.

Among other Treasury programs, the HR Connect program for modernizing the department's human resources information systems could get $23 million in fiscal 2005. The president's request for the Treasury Direct program, which lets citizens buy Treasury securities electronically, is $3.6 million, a $200,000 increase. The budget also includes $400,000 for departmentwide efforts to preserve electronic records.

The president's budget offered an occasion for the Office of Management and Budget to note Treasury's failure to have a modernization blueprint in hand. But the department has told OMB that it will have a finished modernization plan by July.