Treasury Secretary Steven Mnuchin and IRS Commissioner Charles “Chuck” Rettig testified on May 15 before a Senate panel regarding:
- IRS modernization; and
- the Service’s Fiscal Year (FY) 2020 budget.
Trump’s FY 2020 IRS Budget Proposal
The Senate Appropriations Financial Services Subcommittee held the May 15 hearing to review the Trump administration’s FY 2020 funding request for Treasury and the IRS. During the hearing, Mnuchin and Rettig both praised the Trump administration’s $11.472 billion IRS budget proposal and highlighted the IRS’s Integrated Modernization Business Plan.
Several Democratic senators expressed concern that the IRS has been underfunded since 2010. However, Mnuchin and Rettig assured members of the panel that the Trump administration’s proposed FY 2020 budget would adequately fund the IRS.
Trump’s Budget Proposes Increased IRS Funding, Legislative Proposals
Trump’s FY 2020 IRS budget proposes $170 million in base funding, or 1.5 percent, more than the FY 2019 enacted level of $11.303 billion, Rettig told lawmakers. Additionally, Trump’s budget proposes a program integrity cap adjustment that would provide an additional $362 million in FY 2020 to fund certain IRS enforcement programs.
Notably, Trump’s budget request for the IRS contains several legislative proposals for Congress to consider. Generally, the legislative priorities included in the budget proposal address the following areas:
- streamlined critical pay authority;
- increased flexibility for correction procedures of certain errors;
- authority to require minimum qualifications for return preparers;
- lower employer threshold for mandatory electronic reporting of W-2 date; and
- new safe harbor for worker classification and information reporting requirements.
“The President’s request provides funding to carry out the IRS mission and invest in high-priority programs that will allow the agency to become more efficient and effective in administering the tax laws,” Rettig testified. Further, Rettig noted that taxpayers deserve a “high-quality customer experience,” which requires advancement in the IRS’s technology. “To do that, the IRS must be properly resourced – consistent with the President’s Budget – to provide the best possible service to taxpayers,” he added.
IRS Integrated Modernization Business Plan
To that end, modernization of IRS technology is Treasury’s “biggest priority,” Mnuchin told lawmakers, adding that “this is an investment that is very important to taxpayers.”
The Trump administration is requesting $290 million of initial funding for the estimated six-year implementation of the IRS Integrated Modernization Business plan. Currently, the IRS estimates up to $2.7 billion in gross costs over six years to fully implement the plan.
Generally, the IRS Integrated Modernization Business Plan aims to result in administrative improvements, as noted in Rettig’s testimony:
- standardize customer workflows and expand access to information;
- reduce call wait time and case resolution times by using customer callback technology, online notices, and live online customer support;
- simplify identity verification to expand access to online services;
- increase the availability of systems for taxpayers and tax practitioners; and
- make implementation of new tax provisions more straightforward.
By Jessica Jeane, Senior News Editor