IRS releases budget proposal.

On July 6, the Internal Revenue Service Oversight Board released a special report to Congress, recommending a $12.489 billion FY2010 budget for the IRS, a $363 million increase over President Obama's request. The board's budget recommendations are aimed at addressing two weaknesses in the U.S. tax administration system: the $290 billion tax gap and the archaic nature of IRS information systems.

The board recommends that $400 million be appropriated for the Business Systems Modernization (BSH) program so that the pace of progress is increased, allowing for the daily processing of taxpayer accounts and the completion of a centralized relational database of taxpayer records that should be completed in 2011. The board is concerned that under the President's budget request, it will take longer to provide taxpayers with more secure, modern information technology to support the tax administration system.

The Administration also is providing a $5.5...