The U.S. House of Representatives passed a Treasury appropriations bill last week to provide the Internal Revenue Service with $10.5 billion in fiscal year 2006. The Senate has yet to take up consideration of the bill.

The bill easily won passage with a 405-18 vote, after representatives rejected two contentious amendments, the first barring corporate expatriates from competing for federal contracts, and a second halting IRS plans to outsource debt collection. The bill does include an amendment that could slow an IRS plan, first announced in May, to close 68 taxpayer assistance centers. The measure will require an independent report on the centers to be issued before any action is taken.The bill represents a $313 million increase from fiscal 2005, but the amount is still less than the original budget request after the House shaved off $446 million requested for tax enforcement. The $10.5 billion includes $4.5 billion for enforcement, up $218 million from the fiscal 2005 IRS budget.

An analysis by the Government Accountability Office of the original request this spring noted that the IRS had increased plans for enforcement action, as well as reducing funding for taxpayer service and Business Systems Modernization. The GAO report said that the IRS should move to develop long-term goals now, as recently introduced services may make it possible to maintain the overall level of service to taxpayers by offsetting reductions in some areas.

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