Bigger IRS Enforcement Budget Sought

Administration Plans to Request an Additional $500 Million

The Bush administration plans to ask Congress for an additional $500 million to strengthen the Internal Revenue Service's enforcement efforts during the coming year, the Treasury Department said yesterday.

The department said the administration will seek an IRS enforcement budget of $6.89 billion for fiscal 2006, 7.8 percent more than what Congress approved for this fiscal year.

The Treasury Department did not give a figure for its overall budget request for the IRS. The agency's budget this year totals nearly $10.3 billion, a slight increase over the $10.2 billion of 2004, but about $380 million less than the Bush administration requested.

The administration and Congress have paid attention to the estimated $300 billion-plus "tax gap" between what Americans owe and what they pay. Tougher enforcement, which would generate more tax collections, has increased appeal in view of the large federal budget deficit.

"Increasing enforcement not only catches tax cheats, but discourages others from avoiding paying their taxes," Treasury Secretary John W. Snow said in a written statement.

"Enforcement more than pays for itself," Internal Revenue Commissioner Mark W. Everson said in a prepred statement. "Particularly in a period of deficit reduction, funding IRS enforcement is a wise investment."

However, budget increases do not necessarily mean more enforcement capacity for the IRS. Congressionally approved pay increases for IRS employees and other increaded expenses often eat up some or all of the agency's additional funding.

According to the IRS Oversight Board, created in 1998 to help set the agency's long-term strategies and goals, fiscal 2005 was the fourth year in a row in which "the administration has called for IRS staff increases while not covering pay raises or required expenses."

Last year, the board recommended a 10 percent increase in the IRS budget -- to $11.2 billion for fiscal 2005 -- arguing that such a boost would produce $5 billion in additional revenue every year. But in December, the board noted that Congress had appropriated an increase of less than 1 percent for fiscal 2005, while mandating a 3.5 percent pay raise for federal workers.