The need for IRS funding: January 11, 2002.

On January 11, 2002, TEI President Bob Ashby sent the following letter to Treasury Secretary Paul O'Neill and Office of Management and Budget Director Mitchell Daniels concerning the need for adequately funding the Internal Revenue Service.

On behalf of Tax Executives Institute, I am writing to urge you to ensure that the Internal Revenue Service receives the funds it needs to effectively administer this country's tax laws.

TEI's 5,200 members are accountants, attorneys, and other business professionals who work for the largest 2,800 companies in the United States, Canada, and Europe. TEI's members work on tax issues, and with the IRS, on an every day basis. They are responsible for conducting the tax affairs of their companies and ensuring their compliance with the tax laws. TEI is dedicated to the development and effective implementation of sound tax policy, to promoting the uniform and equitable enforcement of the tax laws, and to reducing the cost and burden of administration and compliance to the benefit of taxpayers and government alike. The Institute is committed to maintaining a system that works -- one that builds upon the principle of voluntary compliance and is consistent with sound tax policy, one that taxpayers can comply with, and one in which the IRS can effectively perform its audit function without unduly burdening taxpayers.

As the preeminent association of business tax executives, TEI knows how critical it is to invest in and plan for the future. Our members know the importance of sound business processes and strict internal controls. Equally important, the companies represented by TEI's membership know that to be successful, they must plan ahead and ensure that adequate resources are devoted to core functions such as customer service and employee training. As a group, they applauded the decision to restructure the IRS to operate more like a business and to adopt a customer (i.e., taxpayer) satisfaction focus.

If the leaders of the IRS are to continue their efforts to rebuild the agency's credibility and effectiveness, the agency must be assured that the programs needed to implement its mission will be fully and consistently funded. Much has been accomplished under the IRS Restructuring and Reform Act, but much remains to be done. Although we recognize that the IRS has experienced some problems with its inventory management, we believe that the agency has made substantial progress in dealing with internal management issues. In addition, these concerns, while important, should not impede the IRS's efforts to deal with its broader mission. TEI respectfully suggests that reducing the IRS's funding at such a critical juncture in its reorganization is not the most efficient or effective way to address the inventory management issue. If the IRS is to succeed in reinventing itself as a modern, customer-focused agency, it must have adequate funding for its service initiatives.

If you have any questions, please do not hesitate to contact me, at 615.432.4621, or Timothy J. McCormally, TEI's Executive Director, at 202.638.5601.