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28. Department of the Treasury


Highlights of 2002 Funding

  • Provides $400 million in investments to modernize IRS's outdated computer systems.

  • Completes IRS staffing initiative to improve customer service and tax system fairness.

  • Increases spending for the Customs Service interdiction efforts against illegal drugs.



IRS Information Technology: The budget includes close to $400 million in investments to modernize the IRS's outdated computer systems. This multi-year project will provide IRS with the modern tools needed both to deliver first class customer service to America's taxpayers and to ensure that compliance programs are administered efficiently.

IRS Customer Service and Audit enhancements: The 2002 Budget also includes follow-on funding for the IRS's Staffing Tax Administration for Balance and Equity (STABLE) initiative, begun in 2001. These funds will complete the hiring of almost 4,000 staff and will enable the IRS to address the decline in audits and the drop in customer service that have occurred over the past several years.

Department of the Treasury, 6.4% Average Annual Growth, 1998-2002

Western Hemisphere Drug Elimination Act: Consistent with the President's promise to increase spending to implement the Western Hemisphere Drug Elimination Act, the United States Customs Service will direct an additional $35 million to work, in coordination with the United States Coast Guard, to improve interdiction efforts against illegally imported drugs.

Redirected Resources

Treasury will continue its efforts to promote financial services in low-income communities through the Community Development Financial Institutions Fund (CDFI) program, which will be in charge of administering the tax credit authorized in the Community Renewal Act of 2000, and the Electronic Transfer Accounts initiative. However, support for CDFI will be reduced below the 2001 appropriated level and the Expanded Access to Financial Services (First Accounts) initiative will receive no further funding.

Potential Reforms

For many years, Treasury has searched for ways to ensure that the large investments required in information technology modernization are invested wisely and to ensure that the Federal Government's particular expertise in law enforcement is shared across the nation with States and localities.

Investments in Technology: The Treasury Department must ensure that its major technology modernization efforts are managed effectively. The IRS must ensure that there is no repeat of the management problems that forced the Department to abandon its effort in 1995 to modernize its tax systems. The Department should ensure that similarly robust management processes are in place for its other technology projects, including the efforts to replace the automated import processing system used by the United States Customs Service.

Law Enforcement Best Practices: Treasury's law enforcement bureaus should implement a series of "best practices" initiatives to enhance the effectiveness of Federal efforts to aid States and localities in the fight against violent crime. Specifically, the 2002 Budget includes an effort by the Federal Law Enforcement Training Center to provide guidelines for law enforcement training standards and certification of law enforcement training. Also, the Bureau of Alcohol, Tobacco, and Firearms should work with the expanded Youth Crime Gun Interdiction Initiative and develop a model for best practices.

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