The 1988 Tax Return Filing Season and IRS' Fiscal Year 1989 Budget

GAO discussed the status of the 1988 tax return filing season and the Internal Revenue Service's (IRS) budget request for fiscal year 1989. GAO found that: (1) IRS has not encountered any serious problems in processing tax returns in 1988; (2) IRS personnel gave incorrect responses to test calls to its telephone assistance sites 38 percent of the time; (3) IRS did not expect any unusual processing delays, although it expected to receive an estimated 107 million individual income tax returns during the 1988 filing season; (4) over-the-counter distribution of forms and publications improved; and (5) taxpayers were generally satisfied with the timeliness and usefulness of assistance provided at IRS walk-in centers. GAO also found that: (1) IRS proposed a revenue initiative for 1989 that would have provided it with 2,500 additional examination positions, but the initiative was deleted in a bipartisan budget agreement; and (2) there was conflicting evidence as to how much increased revenue the initiative would generate. GAO believes that Congress may wish to consider authorizing additional examination resources for 1989 if it believes that would generate substantial revenues in succeeding years.