IRS Requests $8.84 Billion Budget; Up Ten Percent

July 7, 2008 - 7:02 PM

Washington ( - Just one week before the April 17th filing deadline for millions of US taxpayers, the Internal Revenue Service requested an almost ten percent increase in its operating budget on Monday, saying that the agency needs more workers and better equipment to collect almost $2 trillion in taxes this year.

"The IRS must modernize its organizational structure and technological base," IRS Commissioner Charles Rossotti told the House Government Reform Subcommittee on Government Management, Information and Technology.

Also appearing before the panel was the head of the National Treasury Employees Union, which represents the more than 98,000 IRS employees, Colleen Kelley, who recommended the hiring of 2,800 new IRS employees beginning in October.

The new staffing is necessary, said Kelley, because "technology alone cannot possibly manage the increasing workload at the IRS."

However, some testifying before the subcommittee said that the current tax system is too complex for any amount of money or technology to fix. What the tax system needs is a "complete overhaul," said National Taxpayers Union Senior Counselor David Keating.

"A fundamental problem for taxpayers and the IRS is the complexity of our tax law," Keating told the subcommittee. "Every detail of a taxpayer's private financial life is open for government inspection," he added.

Instead of building a bigger, more powerful IRS, said Keating, the "economy as well as our civil liberties would be better off with fundamental tax reform."

In 1998 Congress passed, and President Clinton signed into law, the Internal Revenue Service Restructuring and Reform Act which mandates that the IRS modernize and streamline its operations, and become more responsive to taxpayers' needs. However, Keating maintained that it is still too soon to know if those reforms will succeed or fail.

"If reform is successful, it will take many years before the average taxpayer will notice substantial improvements of the IRS," said Keating.