Tax Administration: IRS' Budget Request for Fiscal Year 1994

GAO discussed the Internal Revenue Service's (IRS) fiscal year (FY) 1994 budget request. GAO noted that: (1) IRS requested $7.4 billion and 116,060 full-time equivalents (FTE) for FY 1994, an increase of $284 million and 792 FTE over FY 1993; (2) the $82.8-million budget request for synchronized systems deployment is inappropriate, since IRS may not be able to complete the four systems involved; (3) underfunding of basic IRS operations may undermine objectives of IRS compliance initiatives and, IRS may not fully realize productivity savings; (4) some compliance initiative goals can be achieved without staffing increases by changing IRS collection processes and redirecting resources from the field to the service centers and call sites, improving IRS electronic screens for potentially fraudulent returns, and better targeting of enforcement efforts; (5) the IRS budget request for taxpayer services may not improve telephone accessibility, since demand for IRS telephone assistance will probably increase significantly and IRS is requesting 67 fewer FTE; (6) IRS is reducing waste and inefficiency by improving its computer systems and offering filing alternatives to taxpayers; (7) IRS needs to streamline its regional office operations and consolidate administrative services; and (8) several IRS regional offices are reducing duplication in administrative services and resources management, and IRS headquarters is attempting to reduce management layers and divert staff to front-line activities.