Thursday April 12 5:15 PM ET
IRS Board Says Bush Budget Slights Needed Reforms

WASHINGTON (Reuters) - With the federal tax filing deadline looming, a board appointed to oversee the overhaul of the Internal Revenue Service said on Thursday that President Bush's proposed budget shortchanges the IRS of money for reforms ordered by Congress.

The IRS Oversight Board, established by a 1998 law to try to make the tax collection agency more user-friendly and efficient, said Bush's budget fell 8.9 percent below the amount it thinks is needed to meet Congress' demands.

The board, which answers to Congress and the president, wants $10.26 billion to run the IRS, upgrade equipment and carry out improvements in fiscal 2002 that starts on Oct. 1.

Bush's proposed budget, released on Monday, provides $9.422 billion, up nearly 7 percent from fiscal 2001 and ahead of the 4 percent average increase the White House imposed on other agencies.

``The White House would tell you that they are trying to get the money, but we're saying it's still not enough given the massive problems the IRS is trying to fix,'' Larry Levitan, board chairman, said.

``It is well known that the IRS is broken. It is not meeting any of the goals and objectives demanded by Congress and the American taxpayers,'' Levitan said.

But Treasury Secretary Paul O'Neill in a statement said the White House budget offered the IRS ``a sensible but significant'' increase.

``I am confident that the amount in the president's budget will allow the IRS to provide America's taxpayers with better quality service and help to enforce the tax laws with integrity and fairness,'' O'Neill said.

Levitan, promising ``the board will make as much noise as we can'' for more IRS money, said there were some strange inconsistencies in the White House budget.

For example, he said, Bush's budget provides for new software, but not the upgrade in computers needed to run it.

``It seems ridiculous to develop new software that will make the IRS more effective and then not be able to deliver it to many IRS employees because their desktop and laptop computers are old technology,'' the report said.

Former President Bill Clinton and Congress feuded over the IRS budget last year. Congress, which had blamed the agency for intimidating taxpayers while failing to crack down on cheaters, finally met Clinton's demands for more money to carry out reforms.

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