Questions about economic stimulus payments and tax rebates kept the phones buzzing at Internal Revenue Service offices and cost the IRS a considerable chunk of its budget.

"The recent passage of this legislation created additional, unanticipated workload for IRS and required IRS to act quickly to deal with the public's questions and begin issuing payments," said James R. White, director of strategic issues at the Government Accountability Office, in testimony before the House Ways and Means Oversight Subcommittee.

He noted that demand for telephone assistance related to the economic stimulus legislation has been unprecedented. For the week ending May 24, volume was almost six times greater than the same week last year. Despite reallocating staff from collections work to answering stimulus-related calls, the percentage of callers who got through to an assistant declined to 39 percent for the week ending May 24, compared to 80 percent for the same week last year. The costs of implementing the economic stimulus legislation may reach $862 million.

Reallocation of hundreds of IRS collections staff to answering taxpayer telephone calls will result in up to $565 million in foregone enforcement revenue, according to IRS estimates.

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