Department of the Treasury 

Internal Revenue Service 

Congressional Budget 

Justification and Annual 

Performance Report and Plan 

FY 2019 
IRS-i 

Table of Contents 

Section I – Budget Request ...................................................................................................... 3

1A – Mission Statement ....................................................................................................... 3

1.1 – Appropriations Detail Table ....................................................................................... 3

1B – Summary of the Request ............................................................................................. 4

1.2 – Budget Adjustments Table ....................................................................................... 10

1C – Base Adjustment and Program Changes Description ............................................ 11

Resource Adjustment ......................................................................................................... 11

Maintaining Current Levels (MCLs) ............................................................................... 11

Efficiencies and Savings ..................................................................................................... 11

Increase e-File Savings ..................................................................................................... 11

Space Optimization ........................................................................................................... 11

Reinvestment ....................................................................................................................... 12

Supporting Aging IT Infrastructure ................................................................................... 12

Program Decreases ............................................................................................................. 12

Action to Achieve Workforce Management Goals ........................................................... 12

Realignment from BSM to Operations Support ................................................................ 12

Program Increases .............................................................................................................. 13

Stabilize, Secure and Transform IT Operations ............................................................. 13

Strengthen Cyber Security ................................................................................................ 13

Identity Assurance - e-Authentication Enhancements and Authorization Integration...... 14

Aging Technology Infrastructure ...................................................................................... 15

Migration to Cloud Services ............................................................................................. 15

Stabilize IT Operations ..................................................................................................... 15

Support Taxpayer Services and Online Account Activities ........................................... 16

1D – Appropriations Language and Explanation of Changes ....................................... 18

1E – Legislative Proposals ................................................................................................. 24

1F - IRS Use of Evidence and Evaluation ........................................................................ 26

Section II – Budget and Performance Plan .......................................................................... 28

Taxpayer Services ............................................................................................................... 28

2.1 – Budget Adjustments Table ....................................................................................... 29

2.2 – Operating Levels Table ............................................................................................ 30

2.3 – Appropriation Detail Table ...................................................................................... 31

2A – Pre-Filing Taxpayer Assistance and Education ....................................................... 31

2.1.1 – Budget and Performance Report and Plan ............................................................ 33

2B – Filing and Account Services ..................................................................................... 33

2.1.2 – Budget and Performance Report and Plan ............................................................ 36

Enforcement ........................................................................................................................ 37

2.1 – Budget Adjustments Table ....................................................................................... 38

2.2 – Operating Levels Table ............................................................................................ 39

2.3 – Appropriation Detail Table ...................................................................................... 40

2C – Investigations ............................................................................................................ 40

2.1.3 – Budget and Performance Report and Plan ............................................................ 42

2D – Exam and Collections .............................................................................................. 42
IRS-ii 

2.1.4 – Budget and Performance Report and Plan ............................................................ 48

2E – Regulatory ................................................................................................................ 48

2.1.5 – Budget and Performance Report and Plan ............................................................ 50

Operations Support ............................................................................................................ 51

2.1 – Budget Adjustments Table ....................................................................................... 52

2.2 – Operating Levels Table ............................................................................................ 53

2.3 – Appropriation Detail Table ...................................................................................... 53

2F – Infrastructure ............................................................................................................. 54

2.1.6 – Budget and Performance Report and Plan ............................................................ 56

2G – Shared Services and Support .................................................................................... 56

2.1.7 – Budget and Performance Report and Plan ............................................................ 60

2H – Information Services ................................................................................................ 61

2.1.8 – Budget and Performance Report and Plan ............................................................ 65

Business Systems Modernization ...................................................................................... 66

2.1 – Budget Adjustments Table ....................................................................................... 67

2.2 – Operating Levels Table ............................................................................................ 68

2.3 – Appropriation Detail Table ...................................................................................... 69

2I – Business Systems Modernization .............................................................................. 69

2.1.9 – Budget and Performance Report and Plan ............................................................ 73

Section III – Supplemental Information ............................................................................... 74

3.1 – Summary of Capital Investments ............................................................................ 74

3.2 – Return on Investment (ROI) for IRS Major Enforcement Programs ................. 79

3.3 – IRS Performance Measure Table ............................................................................ 81

3.4 – Summary of FY 2017 Savings Realized ................................................................... 83

Section IV – Appendix ............................................................................................................ 84

4.1 – Appropriations Detail Table with Program Integrity Cap Adjustment .............. 84

Increase Audit Coverage ................................................................................................... 87

Increase Collection Coverage ........................................................................................... 89

Prevent Identity Theft & Refund & Reduce Improper Payments ..................................... 91

Improve Identity Assurance .............................................................................................. 92

Tax Return Preparer Compliance and Program Responsibility ........................................ 93

Expand Cyber and Counterterrorism Investigative Activities .......................................... 96

Return Review Program .................................................................................................... 97

4.2 – Summary of IRS FY 2019 Identity Theft Budget Request .................................... 98

4.3 – Summary of IRS FY 2019 ACA Budget Request ................................................... 98

4.4 – Summary of IRS FY 2019 Cyber Security Budget Request .................................. 99

4.5 – Summary of IRS FY 2019 Request ........................................................................ 100
IRS-3 

Section I – Budget Request 

1A – Mission Statement 

Provide America’s taxpayers top-quality service by helping them understand and meet their 

tax responsibilities and enforce the law with integrity and fairness to all. 

1.1 – Appropriations Detail Table 

Dollars in thousands 

Internal Revenue 

Service (IRS) Change % Change 

Appropriated 

Resources FY 2017 

Enacted1 FY 2018 Annualized CR2 FY 2019 Request3 FY 2018 to FY 2019 Request 

FY 2018 to FY 2019 

Request 

New Appropriated 

Resources: FTE AMOUNT FTE AMOUNT FTE AMOUNT FTE AMOUNT FTE AMOUNT 

Taxpayer Services 28,692 $2,455,754 26,977 $2,349,688 24,668 $2,241,000 (2,309) ($108,688) -8.56% -4.63% 

Pre-Filing Taxpayer 

Assistance and 

Education 

4,700 607,043 4,451 603,424 4,460 607,753 9 4,329 0.20% 0.72% 

Filing and Account 

Services 23,992 1,848,711 22,526 1,746,264 20,208 1,633,247 (2,318) (113,017) -10.29% -6.47% 

Enforcement 36,550 $4,640,000 34,662 $4,606,996 34,662 $4,628,204 $21,208 0.46% 

Investigations 3,079 595,206 2,913 576,802 2,913 578,949 

2,147 0.37% 

Exam and Collections 32,602 3,914,546 30,811 3,874,918 30,811 3,893,373 

18,455 0.48% 

Regulatory 869 130,248 938 155,276 938 155,882 

606 0.39% 

Operations Support 10,835 $3,849,246 10,813 $3,913,988 10,959 $4,155,796 146 $241,808 1.35% 6.18% 

Infrastructure 869,732 847,444 860,058 

12,614 1.49% 

Shared Services and 

Support 4,777 991,504 4,588 994,559 4,588 1,005,911 11,352 1.14% 

Information Services 6,058 1,988,010 6,225 2,071,985 6,371 2,289,827 

146 

 

217,842 2.35% 10.51% 

Business Systems 

Modernization 557 $290,000 516 $288,031 516 $110,000 ($178,031) -61.81% 

Subtotal New 

Appropriated 

Resources 

76,634 $11,235,000 72,968 $11,158,703 70,805 $11,135,000 (2,163) ($23,703) -2.96% -0.21% 

Other Resources: 

Reimbursables 853 152,161 1,033 173,557 552 113,535 (481) (60,022) -46.56% -34.58% 

Offsetting Collections - 

Non Reimbursables 16,407 16,407 17,227 820 5.00% 

User Fees 161 241,485 75 499,100 71 498,900 (4) (200) -5.33% -0.04% 

Recovery from Prior 

Years 2,497 18,351 18,331 (20) -0.11% 

Unobligated Balances 

from Prior Years 36 297,310 827 351,715 353,222 (827) 1,507 -100% 0.43% 

Transfers In/Out 17 

Resources from Other 

Accounts 1 1 1 

Subtotal Other 

Resources 1,051 $709,877 1,936 $1,059,130 624 $1,001,215 (1,312) ($57,915) -67.77% -5.47% 

Total Budgetary 

Resources 77,685 $11,944,877 74,904 $12,217,833 71,429 $12,136,215 (3,475) ($81,618) -4.64% -0.67% 

1

FY 2017 Enacted reflects levels appropriated in H.R. 255, the Consolidated Appropriations Act of 2017. For further details on the execution of 

these resources, see the 2019 Budget Appendix chapter for the Department of the Treasury. Includes $220 million interappropriation transfer from 

Enforcement to Taxpayer Services ($90 million) and Operations Support ($130 million). FY 2017 Enacted also includes $290 million in Section 

113 Administrative Provision funding allocated in the following amounts: $209.2 million in Taxpayer Services and $80.8 million in Operations 

Support. FY 2017 full-time equivalent (FTE) are actuals and reconcile to the final FY 2017 Obligations and Expenses report, which included the 

36 FTE funded from prior year balances shown in the table above. Other Resources are actuals. Resources from Other Accounts include other 

direct FTE funded by the Federal Highway Administration. 

2

FY 2018 Annualized Continuing Resolution (CR) reflects a rescission of 0.6791 percent applied to the FY 2017 Enacted levels. FY 2018 

Annualized CR also includes a notional $220 million interappropriation transfer from Enforcement to Operations Support to cover anticipated 

operations and maintenance requirements in FY 2018. The IRS will submit a formal transfer to request to Congress as part of the IRS FY 2018 

operating plan upon enactment of a final appropriations bill. FY 2018 Annualized CR includes $288 million in Section 113 Administrative Provision 

funding in the following amounts: $208 million in Taxpayer Services and $80 million in Operations Support. FY 2018 Annualized CR does not 

include resources to implement new requirements under the Tax Cuts and Jobs Act (Public Law 115-97). 

3

FY 2019 Request in this table excludes the proposed $362 million discretionary program integrity investment in FY 2019: $205 million for 

Enforcement and $157 million for Operations Support. More information about the program integrity cap adjustment can be found in Section 4.1. 
IRS-4 

1B – Summary of the Request 

FY 2019 Budget Request 

The IRS FY 2019 base budget request of $11.135 billion provides funding to administer the 

nation’s tax system, generate more than $3 trillion in revenue to fund critical defense and 

general program requirements, meet demand from hundreds of millions of taxpayers, issue 

more than $400 billion in tax refunds and outlays, protect billions of taxpayer records, and 

strengthen tax compliance. 

The Budget invests in high-priority programs that will allow the IRS to administer the new tax 

law and to become more efficient and effective and ultimately assist more taxpayers. These 

investments include modernizing taxpayer services and expanding opportunities for taxpayers 

and their representatives to complete certain service and compliance interactions through their 

preferred channel, be it online, by telephone, or in-person at one of the IRS’s 365 Taxpayer 

Assistance Centers (TACs). Modernizing taxpayer services will help simplify filing returns 

for the vast majority of taxpayers and result in more resources for taxpayers who use 

traditional service channels, all of which will increase voluntary compliance and improve tax 

administration. The Budget invests in technology and analytics to take advantage of the most 

effective tax enforcement strategies and protect taxpayers’ refunds from fraudulent schemes. 

The Budget also increases funding for security and replacing obsolete hardware to protect 

taxpayer-sensitive data from ever-increasing cyber threats. 

The Budget will allow the IRS to help all taxpayers to meet their tax obligations by 

simplifying the process of filing and amending returns and payment; protect the integrity of 

the tax system by reviewing and enforcing tax code; partner with key stakeholders in the state 

and local tax administration, tax preparation, and international communities; cultivate and 

retain a well-equipped, diverse, flexible, and engaged workforce; advance data access, 

usability, and analytics to inform decision making; and drive increased agility, efficiency, 

effectiveness, and security in operations. 

Strategic Plan 2018 - 2022 

Treasury’s new strategic plan and the forthcoming IRS Strategic Plan for FY 2018–2022 

(Plan) guide the IRS’s resource decisions, programs, and operations to meet the changing 

needs and expectations of taxpayers and members of the tax community who serve taxpayers. 

The Plan aligns with the goals and objectives in Treasury’s strategic plan, namely increasing 

U.S. economic growth by administering tax laws to better enable all taxpayers to meet their 

obligations while protecting the integrity of the tax system; transforming government-wide 

financial stewardship by increasing access to and usage of data; and achieving operational 

excellence. The Plan reflects the IRS’s critical role in tax administration. By focusing on 

combatting the increased prevalence of refund fraud and identity theft, transforming taxpayer 

services to meet taxpayer expectations, maintaining a skilled and talented workforce, 

increasing operational efficiency and effectiveness, and meeting the tax needs of a diverse 

U.S. population, the Plan is a guide to successfully accomplishing the IRS mission and vision. 
IRS-5 

Tax Reform 

The Tax Cuts and Jobs Act (Public Law 115-97) is the most significant revision of the U.S. 

tax code in over 30 years. Containing hundreds of provisions intended to provide relief to 

American families and make America’s businesses more competitive, implementing the new 

law will require extensive administrative work in calendar years 2018 and 2019. 

Implementing this new legislation is one of the IRS’s highest priorities. The IRS has 

established a Tax Reform Implementation Office, led by senior leaders, to ensure successful 

implementation. Efforts to implement the new legislation are already underway and two 

important pieces of guidance have been issued addressing certain provisions in the new law. 

On December 29, 2017, the IRS and the Department of the Treasury issued notices on 

amended Internal Revenue Code (IRC) section 965, providing guidance for computing the 

“transition tax” on untaxed foreign earnings of foreign subsidiaries of U.S. companies, and 

the new IRC section 1446(f). In addition, on January 11, 2018, the IRS and the Department 

released a notice updating income tax withholding tables for 2018 based on the new law. 

These early notices provide taxpayers and practitioners with information to timely and 

accurately address new tax compliance obligations. Additional published guidance is 

expected as the IRS continues to analyze the new law’s impact on tax administration. 

The IRS will need additional resources in FY 2018 to implement the new law in a way that 

adequately serves taxpayers, facilitates tax compliance, and protects sensitive taxpayer 

data. Resources are needed to address the following areas: 

 Create new and revised taxpayer forms, instructions, and publications. 

 Provide technical support to taxpayers on issues involving interpretations of the law 

and of related published guidance. Preliminary estimates suggest assistors may need 

to answer four million additional phone calls. This represents a potential 17 percent 

increase over the 23 million assisted calls answered by the IRS in FY 2017. 

 Train IRS employees on the new law and help the public, tax professionals, and other 

industry partners understand how the law applies to them. 

 Reprogram information technology systems, with special focus on return processing 

and compliance systems (the backbone of the tax system). 

Reducing Regulatory Burden 

The IRS and the Department continue to work to identify overly burdensome tax regulations 

for modification or repeal consistent with law and Executive Order 13789 (Identifying and 

Reducing Tax Regulatory Burdens). In October of 2017, the Department released a report 

recommending actions to eliminate or mitigate the burdens imposed on taxpayers by eight 

regulations. These recommendations include withdrawing proposed regulations under 

Section 2704 that would have hurt family-owned and operated businesses by limiting 

valuation discounts. The regulations also would have made it difficult and costly for a family 

to transfer their businesses to the next generation. In addition, the IRS and the Department 

have initiated a comprehensive review, coordinated by the Treasury Regulatory Reform Task 

Force, of all tax regulations, regardless of when they were issued. This review will identify 
IRS-6 

tax regulations that are unnecessary, create undue complexity, impose excessive burdens, or 

fail to provide clarity and useful guidance, and the Department and the IRS will pursue reform 

or revocation of those regulations. As part of this process, the IRS Office of Chief Counsel 

has already identified over 200 regulations for potential revocation, most of which have been 

outstanding for many years. 

Modernizing Tax Administration 

The IRS must balance three competing priorities when allocating resources: basic tax 

administration (i.e., filing season), maintaining infrastructure, and modernizing legacy 

systems and procedures. The IRS has to prioritize filing season needs with other important 

but less visible activities such as infrastructure, support staffing, and strategic enforcement. 

This prioritization may potentially result in lower tax compliance and long-term risk for the 

voluntary compliance-based U.S. tax system. A one percent drop in the voluntary 

compliance rate is estimated to cost the government tax revenue of $30 billion each year. 

The Budget balances these competing priorities by investing in mission-critical areas 

including taxpayer applications, enforcement, essential infrastructure, and security. 

Staffing: The IRS is committed to providing taxpayers and their representatives with high 

quality, secure service through all available channels. Taxpayer preferences are changing. 

More taxpayers prefer to interact with the IRS using digital tools at the time and place of 

their choosing. The Budget invests to ensure the IRS is meeting taxpayers’ needs. For 

example, the Budget proposes an investment of $18 million and 126 FTE to assist more 

taxpayers with account management and online authentication issues and help taxpayers 

navigate submission processing and collection issues. 

Information Technology Infrastructure: The IRS must continue efforts to replace obsolete 

hardware and software and provide a stable foundation for delivering technology services 

required for day-to-day operations, transforming the tax experience, and modernizing 

operations. At the end of FY 2017, more than 59 percent of IRS hardware was past its 

useful life and 26 percent of software was two or more releases behind the most current 

commercially available version. The Budget provides additional resources to reduce the 

aged inventory backlog with the goal of reaching 54 percent of hardware in FY 2019 and an 

industry standard of 20 to 25 percent by FY 2023. This investment will improve employee 

productivity and enhance taxpayer service by reducing equipment outages and system 

failures. Operating on the latest hardware and software also will help the IRS better protect 

taxpayer information by facilitating faster, more comprehensive patching and by limiting 

exposure to security flaws. 

Modernizing Operations: IRS systems need to be modernized to gain efficiencies, protect 

data, and reduce long-term maintenance costs. The IRS’s modernization efforts will 

standardize business processes, expand the digital conversion of paper case files and 

documentation, automate repetitive manual processes, leverage existing data to detect noncompliance earlier, and enable a strong and secure systems platform to create taxpayer-facing 

applications. The Budget proposes $110 million for system modernization. This funding will 

support, for example, the Enterprise Case Management (ECM) system. ECM will allow the 

IRS to retire more than 60 legacy case applications with similar functions that were setup over 
IRS-7 

many years to meet various legislative and business requirements. Retiring these applications 

will help standardize workflows, allow IRS employees to provide more consistent service to 

taxpayers, and achieve operations and maintenance efficiencies. Investing in ECM will 

directly benefit taxpayers by facilitating a seamless customer service experience. In the future 

when a taxpayer seeks assistance over the phone or online, IRS customer service 

representatives will have tailored access to a centralized case file that contains a history of all 

relevant prior interactions and a holistic package of reference materials to support taxpayers. 

Cases will be routed seamlessly from one business unit to another without manual 

workarounds that burden both taxpayers and employees. The IRS plans to begin transitioning 

to this new platform in FY 2019. More information about ECM and other modernization 

investments can be found in section 2I – Business Systems Modernization and section 3.1 –

Summary of Capital Investments. 

Program Integrity Cap Adjustment 

In addition to the base appropriations request of $11.135 billion, the Budget proposes a 

$362 million discretionary program integrity cap adjustment in FY 2019 to fund new and 

continuing investments in expanding and improving the effectiveness and efficiency of the 

IRS’s overall tax enforcement program. The Budget proposes $205 million for the 

Enforcement account and $157 million for the Operations Support account. Additional 

adjustments are provided in future years to fund new initiatives and inflation. These 

investments will generate approximately $44 billion in new revenue over 10 years and will 

cost about $15 billion for net savings of $29 billion. Notably, this return on investment (ROI) 

is likely understated because it does not reflect the effect that enhanced enforcement has on 

deterring non-compliance. The deterrent effect helps to ensure the continued payment of over 

$3 trillion in taxes voluntarily paid each year. More information about the cap adjustment is 

found in section 4.1 – Appropriations Detail Table with Program Integrity Cap Adjustment of 

the Appendix and in the Budget Process Chapter of the FY 2019 President’s Budget. 

2017 Filing Season 

The IRS delivered a successful 2017 filing season that opened on January 23, 2017. The 

Taxpayer Assistance Center Appointment Service, which is now available nationwide, 

significantly improved in-person assistance and ensured taxpayers did not have to wait in long 

lines to receive assistance. The appointment service is one of many examples of the IRS 

harnessing technology to improve the taxpayer experience. 

Other highlights from the 2017 filing season include: 

 Stopped $5.2 billion in fraudulent refunds claimed by identity thieves on 567,000 tax 

returns through improved screening criteria from January 2017 through October 2017. 

 Delivered a filing season telephone Level of Service (LOS) – the relative success rate 

of taxpayers who call the IRS toll-free number seeking assistance from a customer 

service representative – of 79.1 percent, the highest level since 2007 and a substantial 

improvement over the 72.1 percent delivered during the 2016 filing season. 
IRS-8 

 Reduced the backlog of taxpayer correspondence cases by 100,000, allowing the IRS 

to shift resources to help taxpayers during peak call times and more promptly resolve 

taxpayer issues. 

 Answered almost 10 million phone calls and addressed another 18 million calls 

through automated systems. The average speed of answer was seven minutes, 

compared to 11 minutes in the 2016 filing season, allowing the IRS to resolve 

taxpayer issues faster. 

 Received approximately 136 million individual returns, with more than 90 percent 

filed electronically. 

 Received almost 30.9 million business returns, an increase of 3.3 percent from the 

2016 filing season. 

 Received almost 19.3 million business returns electronically, an increase of almost 

10 percent from the 2016 filing season. 

 Issued 97 million refunds totaling $268 billion, with an average individual refund of 

$2,862. 

 Continued to work with Security Summit partners from state tax agencies and the 

broader tax community to add extra layers of security protection for the filing season. 

Throughout the year, the IRS issued news releases about scams and tax tips to bring 

awareness to taxpayers and tax professionals. 

 Registered nearly 290,000 foreign financial institutions (FFIs) with the IRS and 

assigned a global intermediary identification number (GIIN) via the FFI Registration 

application. More than 6,500 financial institutions and 97 host country tax authorities 

enrolled in the International Data Exchange Service (IDES) to submit information 

returns required under the Foreign Account Tax Compliance Act (FATCA) to the IRS, 

and more than 550 qualified intermediaries (QIs) completed their online application 

via the QI application. 

Return on Investment

The IRS remains one of the most cost-effective investments in the Federal Government. 

Financing the IRS supports an increase in revenue for the country. This unique and critical 

role is vital for the functioning of the U.S. Government and in keeping the nation and 

economy strong. In FY 2017, the IRS collected $3.4 trillion in tax revenue. 

The IRS remains one of the most efficient tax administrators in the world. For every 

$100 collected in taxes, the IRS spends only thirty-five cents. Congress appropriated a total 

of $11.2 billion for the IRS in FY 2017 and IRS enforcement programs collected 

$56.9 billion, for a return on investment (ROI) of about $5.1 for every $1 invested in the IRS. 

This ROI estimate is likely understated because it does not include the revenue effect of the 

deterrence value of these investments and other IRS enforcement programs or the effect of 

education and outreach on voluntary tax compliance. 
IRS-9 

Investment Labor Costing Methodology

The IRS uses a variety of methods to calculate the cost of its investments. Costs for 

investments that require labor funding are calculated by converting the workload to the 

number and type of staff (e.g., Revenue Agents, Revenue Officers, or Special Agents) needed 

to deliver targeted performance goals. Once the number of full-time equivalents (FTE) and 

type of staff are determined, the cost of the FTE is estimated using a Unit Cost Rate (UCR) 

calculator, a tool for projecting FTE salary and non-salary support costs and/or savings. The 

UCR calculator fully covers the salary, benefits, and support costs needed for each FTE. 

Proposed FTE increases in the FY 2019 Budget assume an April 1 hire date, with the 

exception of front-line positions in Submission Processing and Account Management and 

Assistance - Electronic/Correspondence Assistance, which assume an October 1 hire date 

because they provide service to taxpayers during the filing season and can be brought on 

board faster than most other positions. These programs are not as dependent on the traditional 

hiring and training process as other IRS programs because they have a large existing seasonal 

workforce available to work additional hours to meet work demand. To fund the FTE 

requested in the Budget for a full year in FY 2020, including the program integrity 

investment, the IRS would need an additional $193 million and 1,792 FTE. 
IRS-10 

1.2 – Budget Adjustments Table 

Dollars in thousands 

Bureau: Internal Revenue Service 

Summary of Proposed FY 2019 Request FTE Amount 

FY 2018 Annualized CR Level 72,968 $11,158,703 

Changes to Base 

Maintaining Current Levels (MCLs) 93,693 

Pay Annualization 38,727 

Non-Pay Inflation Adjustment 54,966 

Efficiencies/Savings (128) (12,798) 

Increase e-File Savings (128) (6,797) 

Space Optimization (6,001) 

Reinvestment 12,798 

Support Aging IT Infrastructure 12,798 

Subtotal FY 2019 Changes to Base (128) $93,693 

FY 2019 Current Services 72,840 $11,252,396 

Program Changes 

Program Decreases 

Actions to Achieve Workforce Management Goals (2,307) (138,524) 

Realignment from BSM to Operations Support (178,203) 

Subtotal FY 2019 Program Decreases (2,307) ($316,727) 

Program Increases 

Stabilize, Secure and Transform IT Operations 146 $181,305 

Strengthen Cyber Security 10 40,000 

Identity Assurance - e-Authentication Enhancements and Authorization Integration 21 24,300 

Aging Technology Infrastructure 39,000 

Migration to Cloud Services 20,000 

Stabilize IT Operations 115 58,005 

Support Taxpayer Services and Online Account Activities 126 $18,026 

Subtotal FY 2019 Program Increases 272 $199,331 

Total FY 2019 Budget Request 70,805 $11,135,000 

See footnotes in 1.1 – Appropriations Detail Table 
IRS-11 

1C – Base Adjustment and Program Changes Description 

Resource Adjustment 

Base Realignment for Support Services $0 / 0 FTE 

The FY 2018 Annualized CR level of $11.159 billion assumes $220 million will be 

transferred from Enforcement to Operations Support in FY 2018 to cover recurring operations 

and maintenance costs. The IRS will submit a formal notification to Congress in its FY 2018 

operating plan. In recognition of the recurring nature of these expenses, the Budget includes 

the $220 million in the FY 2019 current services or base estimate for Operations Support. 

The base captures the amount of resources needed to maintain services at FY 2018 levels. 

In recent years, the IRS has relied on transfers from Enforcement to Operations Support to 

maintain core functions, information technology, and related support services for all IRS 

employees. These transfers have provided front-line employees with the tools, equipment, 

analytics, secure facilities, and technology support necessary to serve taxpayers. 

Maintaining Current Levels (MCLs).................................. +$93,693,000 / 0 FTE 

Pay Annualization +$38,727,000 / 0 FTE 

Funds are requested for annualization of the January 2018 pay-raise. 

Non-Pay +$54,966,000 / 0 FTE 

Funds are requested for non-labor expenses, such as travel, contracts, rent, supplies, and 

equipment. 

Efficiencies and Savings................................................-$12,798,000 / -128 FTE

Increase e-File Savings -$6,797,000 / -128 FTE

Over the past five years, with an increased focus on taxpayers filing electronically, the IRS 

saved about $14 million and 274 FTE from reduced paper returns and the corresponding FTE 

needed to work submission processing. The IRS projects the receipt of 1,902,000 fewer 

returns filed on paper in FY 2019 (1,301,700 individual and 600,300 business returns) than in 

FY 2018, saving approximately 128 FTE and $6.8 million. 

Space Optimization -$6,001,000 / 0 FTE

The IRS will reduce expenditures on rent and improve usage of office space across the 

country. The IRS plans to reduce its real estate footprint by approximately 500,000 square 

feet by closing or consolidating space for estimated rent savings of $6 million in FY 2019. 
IRS-12 

Reinvestment.........................................................+$12,798,000 / 0 FTE 

Supporting Aging IT Infrastructure +$12,798,000 / 0 FTE 

Funding will be applied to refresh and replace critical IT infrastructure that has aged three to 

four times beyond industry standards for replacement. The IRS requires about $136 million 

to replace assets that have aged in the past fiscal year, and estimates every $10 million spent 

above $136 million will result in a one percent reduction of the aged assets. Thus, 

$12.8 million in addition to $136 million in planned spending within the base should allow for 

replacement of about 1.3 percent of aged assets. At the end of FY 2017 more than 59 percent 

of IRS hardware was past its useful life, compared to 64 percent at the end of FY 2016, and 

32 percent of software was two or more releases behind the most current commercially 

available version. The reduction in FY 2017 is attributable to the availability and application 

of user fee funding and prior year expired balances. The management, maintenance, and 

ongoing enhancement of the IRS’s information technology are central to the reliability of its 

operations, and to the successful accomplishment of its mission. 

Program Decreases ...................................................-$316,727,000 / -2,307 FTE 

Action to Achieve Workforce Management Goals -$138,524,000 / -2,307 FTE 

This decrease is expected to lower the telephone Level of Service from an estimated 75 

percent in FY 2018 to 47 percent in FY 2019. This decrease may delay the sorting and 

shipping of incoming mail within normal mail; delay responses to transcript requests and 

other paper receipts from taxpayers; and result in seasonal employees being placed into 

non-work status. Proposed investments in systems and online services will mitigate these 

effects to some extent. 

Realignment from BSM to Operations Support -$178,203,000 / 0 FTE 

The IRS will continue investing in modernizing systems with the proposed $110 million 

request for Business Systems Modernization. This decrease takes into account the projected 

$237 million in unobligated balances brought forward estimated to be available to support 

modernization in FY 2019 and the need to continue investing in IT infrastructure, security, 

and web services within Operations Support. 
IRS-13 

Program Increases...............................................+$199,331,000 / +272 FTE 

Stabilize, Secure and Transform IT Operations +$181,305,000 / +146 FTE

Strengthen Cyber Security +$40,000,000 / +10 FTE 

The IRS protects against more than one 

million cyber-attacks each day and 

operates strong network perimeter defenses 

to mitigate threats, detect vulnerabilities, 

and monitor network security. Sustained 

investments are required to protect against 

increasingly sophisticated adversaries while meeting taxpayer expectations for online 

services. The IRS will enhance network security via cyber-threat forensics, implementation 

of a comprehensive patch management system, and the adoption of government-wide 

information security continuous monitoring tools as part of a layered defense. 

This investment will fund continued efforts to protect sensitive data by executing a multi-year 

plan to enhance security standards, configurations, and controls across the IRS’s largely 

customized application portfolio and expansive inventory of end-of-life infrastructure assets. 

The IRS will leverage these funds to meet or exceed federal requirements governing 

confidentiality, integrity, and the availability of IRS systems, services, and data. In addition, 

the IRS will reduce security risks associated with aged cybersecurity infrastructure and 

enhance the effectiveness of cybersecurity in the following areas: 

 IT Security Safeguards: Enables expanded capabilities and improved execution for 

the identification and mitigation of vulnerabilities across the disparate, geographically 

dispersed IRS technology infrastructure. These expanded safeguards are aimed at 

preventing inappropriate access to IRS systems, eliminating vulnerabilities that may be 

exploited internally or externally, and protecting sensitive information. 

 Continuous Monitoring and Advanced Threat Detection, Defense, and Response:

Improves threat detection, activity auditing, anomaly detection, forensic analytics, 

24x7 monitoring, and technology solutions for voluminous data consumption, 

encrypted transport, storage, aggregation, correlation, and visualization. 

 Cybersecurity Infrastructure: Replaces and updates cybersecurity infrastructure to 

provide a scalable architecture platform that addresses increased data demands to 

store, manage, and analyze significantly larger volumes of structured and unstructured 

data. This infrastructure platform is the foundation for cybersecurity data captured 

across the IRS used to secure the enterprise and prevent fraudulent activity. 

 

P o sitio n T ype/ Other C o sts F T E $ 000

St reng t hen C yber Securit y 10 .0 0 $4 0 ,0 0 0

IT Specialist 10.00 1,712

Software & Hardware 10,329

Contractual Services 27,959

Total 10 .0 0 $4 0 ,0 0 0
IRS-14 

Identity Assurance - e-Authentication Enhancements and Authorization Integration

+$24,300,000 / +21 FTE 

Nearly all of the IRS’s online services are 

dependent upon secure authentication and 

authorization processes: ensuring customers 

are who they say they are, and ensuring they 

are given the appropriate access to specific 

services or data. The IRS is facing a backlog 

of enhancements and defect fixes that are 

needed to ensure compliance and functionality. Secure Access (e-A3) is the registration and 

log-in mechanism (the front door) for taxpayers to access most online applications and is a 

critical cyber defense that prevents inappropriate access to taxpayer data. e-A3 helps 

taxpayers register for a Secure Access account and enables more taxpayers to use online 

applications. 

This investment will continue efforts to make the log-in process more secure, user-friendly, 

and compliant with federal identity and security standards, and to develop new authorization 

capabilities to manage permissions to access customer data and information. This effort 

supports secure customer access through an integrated suite of capabilities, applied 

consistently across channels. Specific capabilities include: 

 Enhanced ID proofing and authentication technology that will utilize internal IRS data 

(e.g., tax and information return data), third party trusted sources, and risk-based 

authentication (e.g., real-time decisions). 

 Reporting capabilities will provide the tools and infrastructure to track and manage real 

time business performance metrics, fraud analytics, system performance results, and 

application usage information. 

 Integration of e-Authentication data with data from other channels, such as phones, to 

perform analytics on the customer experience and fraud detection. 

 Authorization capabilities to perform attribute-based access controls for third parties and 

tax professionals. 

 e-Signature solution to provide the ability for authenticated taxpayers to electronically 

sign and submit returns, statements, and other documentation. 

 Response and recovery capabilities and processes to respond to data breaches and fraud 

incidents. 

P o sitio n T ype/ Other C o sts F T E $ 000

Ident it y A ssurance - eA ut hent icat ion Enhancement s 

and A ut horizat ion Int egrat ion 2 1.0 0 $2 4 ,3 0 0

IT Specialist 21.00 3,931

Software & Hardware 3,067

Contractual Services 17,302

Total 2 1.0 0 $2 4 ,3 0 0
IRS-15 

Aging Technology Infrastructure +$39,000,000 / 0 FTE 

The IRS will use this funding to refresh and 

replace critical IT infrastructure. Regular 

maintenance and replacement reduces outages, 

expensive manual workarounds, support costs, 

security vulnerabilities, and dependency on 

contractors. The IRS’s large infrastructure (hardware, software, and middleware) has aged 

three to four times beyond industry standards. Interrelated and interdependent infrastructure 

and systems often create a ripple effect of unpredictable outages and failures, which can 

undermine operations and core tax-administration responsibilities and put a valuable data 

cache at risk. This investment along with the proposed $12.8 million reinvestment of 

efficiency savings and base funding of $136 million will allow the IRS to reduce the 

percentage of hardware past its useful life from an estimated 59 percent in FY 2018 to 54 

percent in FY 2019. 

Migration to Cloud Services +$20,000,000 / 0 FTE 

Migrating to cloud computing service delivery 

models offers the promise of improved resource 

utilization and reduced costs, while streamlining 

IT operations. Allocating additional resources 

will enable the IRS to make progress on migrating to cloud computing service delivery 

models such as Software as a Service (SaaS), providing end users with the capability to utilize 

provider applications running on a cloud infrastructure; platform as a Service (PaaS), 

providing IRS end users with the capability to deploy onto the cloud infrastructure end usercreated applications using programming languages and tools supported by the provider (e.g., 

java, python, .Net); infrastructure as a Service (IaaS), providing IRS end users with the 

capability to provision processing, storage, networks, and other fundamental computing 

resources where the end user is able to deploy and run arbitrary software, which can include 

operating systems (kernel) and software applications. 

Stabilize IT Operations +$58,005,000 / +115 FTE 

The rapid, reliable production of IT capabilities 

is essential to taxpayers and stakeholders. To 

ensure both short and long-term success for both 

the IRS and taxpayers, the IRS must follow an 

operating model that focuses on developing innovative technology solutions in anticipation of 

ever-changing business drivers (taxpayer needs, legislative mandates, security threats, etc.). 

This funding will be used in part to establish a new IT training and development program that 

will help the IRS assess employee skill sets, identify skill gaps, and train new and existing 

employees to fill those gaps and respond more quickly to new legislative requirements, the 

latest security practices, and new technology. Funding will also be used to establish 

communities of practice that will identify and promote best practices across IRS 

organizations and establish an immersive IT learning environment with on-the-job training, 

job shadowing, and employee coaching. These programs will be essential to addressing the 

P o sitio n T ype/ Other C o sts F T E $ 000

A ging Technology 

Inf rast ruct ure $39,000

Software & Hardware 37,050

Contractual Services 1,950

Total $39,000

P o sitio n T ype/ Other C o sts F T E $ 000

M igrat ion t o Cloud Services $2 0 ,0 0 0

Contractual Services 20,000

Total $20,000

P o sitio n T ype/ Other C o sts F T E $ 000

St abilize IT Operat ions 115.0 0 $58 ,0 0 5

IT Specialist 115.00 58,005

Total 115.0 0 $58 ,0 0 5
IRS-16 

IT skills gap faced by the IRS and other federal agencies. Developing a resilient and talented 

IT workforce is essential to protecting IRS systems in the future. 

 

Funding will be used to launch automated testing and continuous delivery systems. These 

systems will standardize the deployment and testing of new code throughout the IT 

ecosystem, which contains more than 400 applications; eliminate existing manual code 

transmittal processes that are costly and prone to human error; increase delivery quality and 

delivery speed; and establish automated rollbacks that would be triggered when testing fails. 

 

Funding will be used to develop a comprehensive analytics strategy that will drive objective, 

data-driven decisions and improve performance measurement in IT; integrate disparate data 

sets from several isolated systems into a comprehensive platform that will allow the IRS to 

examine operational data in a broader context and provide valuable insights to improve IT 

operations; and setup an enterprise monitoring project that will allow systems administrators 

to identify potential performance problems before catastrophic failure occurs. 

Support Taxpayer Services and Online Account Activities

Support Taxpayer Services and Enforcement through Account Management Support and 

Online Service Help Desk Activities (+$18,026,000 / +126 FTE) 

The investment of $18 million and 

126 FTE will support Taxpayer 

Service and Enforcement programs. 

Additional customer service 

representatives will help taxpayers 

troubleshoot collection, account 

management, and submission 

processing issues. These funds also 

will be used to hire additional 

Taxpayer Advocate Service (TAS) 

specialists to help taxpayers navigate 

issues and protect taxpayer rights. 

While the IRS has made significant strides in implementing Secure Access, there are many 

enhancements needed to improve success rates for taxpayers, reduce technical errors, refine 

business rules, improve monitoring capabilities, and integrate additional applications with the 

Secure Access process. This investment will include support for the e-Authentication Help 

Desk to assist taxpayers with establishing or accessing their online accounts. 

 

P o sitio n T ype/ Other C o sts F T E $ 000

A cco unt M anag ement Supp o rt f o r 

A udit and Collect ion C overage 57.0 0 $3 ,555

Customer Service Representatives 31.00 2,096

Seasonal 24.00 1,308

M anagers 2.00 151

Taxpayer Advocacy - Case Coverage 9 .0 0 $1,0 6 9

TAS Specialist 9.00 1,069

Help D esk f o r Imp ro ve Id ent it y 

A ssurance Act ivit ies 6 0 .0 0 $13 ,4 0 2

Program Analyst 15.00 2,246

Customer Service Representatives 45.00 3,203

Contractual Services 7,953

Total 12 6 .0 0 $18 ,0 2 6
IRS-17 

1.3 – Operating Levels Table

Dollars in thousands 

Internal Revenue Service 

Object Classification 

FY 2017 

Enacted 

FY 2018 

Annualized CR 

FY 2019 

Request 

11.1 Full-Time Permanent Positions 5,799,023 5,714,923 5,664,220

11.3 Other than Full-Time Permanent Positions 80,219 69,801 70,107

11.5 Other Personnel Compensation 196,095 208,697 207,397

11.8 Special Personal Services Payments 20,829 22,821 22,931

11.9 Personnel Compensation (Total) 6,096,166 6,016,242 5,964,655

12.1 Personnel Benefits 2,159,138 2,091,006 2,067,223

13.0 Benefits to Former Personnel 29,460 27,408 27,539

Total Personnel and Compensation Benefits $8,284,764 $8,134,656 $8,059,417

21.0 Travel 77,431 88,619 90,644

22.0 Transportation of Things 18,666 23,916 24,381

23.1 Rental Payments to GSA 592,636 593,184 599,002

23.2 Rent Payments to Others 12,203 12,728 12,973

23.3 Communications, Utilities, & Misc 302,230 340,721 347,869

24.0 Printing & Reproduction 28,591 30,182 30,807

25.1 Advisory & Assistance Services 993,184 900,571 877,029

25.2 Other Services 88,616 95,667 96,897

25.3 Purchase of Goods & Services from Govt. Accounts 158,171 168,619 172,820

25.4 Operation & Maintenance of Facilities 195,912 180,602 184,511

25.5 Research & Development Contracts 21

25.6 Medical Care 14,652 13,872 14,199

25.7 Operation & Maintenance of Equipment 37,919 78,741 79,586

26.0 Supplies and Materials 33,085 38,883 39,645

31.0 Equipment 333,784 407,293 454,143

32.0 Land and Structures 17,355 12,097 12,682

41.0 Grants, Subsidies 35,890 35,990 35,990

42.0 Insurance Claims & Indemnities 2,485 2,362 2,405

44.0 Refunds 6

91.0 Unvouchered 7,399

Total Non-Personnel $2,950,236 $3,024,047 $3,075,583

New Appropriated Resources $11,235,000 $11,158,703 $11,135,000

Appropriations 

Taxpayer Services 2,455,754 2,349,688 2,241,000

Enforcement 4,640,000 4,606,996 4,628,204

Operations Support 3,849,246 3,913,988 4,155,796

Business Systems Modernization 290,000 288,031 110,000

New Appropriated Resources $11,235,000 $11,158,703 $11,135,000

FTE 76,634 72,968 70,805

See footnotes in 1.1 – Appropriations Detail Table 
IRS-18 

1D – Appropriations Language and Explanation of Changes 

Appropriations Language Explanation of Changes 

DEPARTMENT OF THE TREASURY 

INTERNAL REVENUE SERVICE 

TAXPAYER SERVICES 

For necessary expenses of the Internal Revenue 

Service to provide taxpayer services, including prefiling assistance and education, filing and account 

services, taxpayer advocacy services, and other 

services as authorized by 5 U.S.C. 3109, at such rates 

as may be determined by the Commissioner, 

$2,241,000,000; of which not less than $8,890,000

shall be for the Tax Counseling for the Elderly 

Program; of which not less than $12,000,000 shall be 

available for low-income taxpayer clinic grants; of 

which not less than $15,000,000, to remain available 

until September 30, 2020, shall be available for a 

Community Volunteer Income Tax Assistance 

matching grants program for tax return preparation 

assistance; and of which not less 

than $206,000,000 shall be available for operating 

expenses of the Taxpayer Advocate 

Service: Provided, That of the amounts made 

available for the Taxpayer Advocate Service, not less 

than $5,000,000 shall be for identity theft casework. 

Note.—A full-year 2018 appropriation for this 

account was not enacted at the time the budget was 

prepared; therefore, the budget assumes this account 

is operating under the Continuing Appropriations 

Act, 2018 (Division D of P.L. 115–56, as amended). 

The amounts included for 2018 reflect the annualized 

level provided by the continuing resolution. 

ENFORCEMENT 

For necessary expenses for tax enforcement activities 

of the Internal Revenue Service to determine and 

collect owed taxes, to provide legal and litigation 

support, to conduct criminal investigations, to 

enforce criminal statutes related to violations of 

internal revenue laws and other financial crimes, to 

purchase and hire passenger motor vehicles (31 

Making funding for the Tax Counseling 

for the Elderly Program equal to the FY 

2017 enacted level. 
IRS-19 

U.S.C. 1343(b)), and to provide other services as 

authorized by 5 U.S.C. 3109, at such rates as may be 

determined by the Commissioner, $4,628,204,000, of 

which not to exceed $50,000,000 shall remain 

available until September 30, 2020, and of which not 

less than $60,257,000 shall be for the Interagency 

Crime and Drug Enforcement program: Provided, 

That of the funds provided under this paragraph, 

$4,628,204,000 is provided to meet the terms of 

section 251(b)(2) of the Balanced Budget and 

Emergency Deficit Control Act of 1985, as 

amended. 

In addition, not less than $204,643,000 for tax 

activities under this heading, including tax 

compliance to address the Federal tax 

gap: Provided, That such amount is additional new 

budget authority for tax activities, including tax 

compliance to address the Federal tax gap, as 

specified for purposes of section 251(b)(2) of the 

Balanced Budget and Emergency Deficit Control 

Act of 1985, as amended. 

Note.—A full-year 2018 appropriation for this 

account was not enacted at the time the budget was 

prepared; therefore, the budget assumes this account 

is operating under the Continuing Appropriations 

Act, 2018 (Division D of P.L. 115–56, as amended). 

The amounts included for 2018 reflect the annualized 

level provided by the continuing resolution. 

OPERATIONS SUPPORT 

For necessary expenses of the Internal Revenue 

Service to support taxpayer services and 

enforcement programs, including rent payments; 

facilities services; printing; postage; physical 

security; headquarters and other IRSwide administration activities; research and statistics 

of income; telecommunications; information 

technology development, enhancement, operations, 

maintenance, and security; the hire of passenger 

motor vehicles (31 U.S.C. 1343(b)); the operations of 

the Internal Revenue Service Oversight Board; and 

other services as authorized by 5 U.S.C. 3109, at 

such rates as may be determined by the 

Language required for the proposed 

program integrity cap adjustment. 

More information about the cap 

adjustment can be found in section 4.1 

– Appropriations Detail Table with 

Program Integrity Cap Adjustment of 

the Appendix and Budget Process 

Chapter of the FY 2019 President’s 

Budget. 

Revised to reflect the FY 2017 enacted 

language. 
IRS-20 

Commissioner; $4,155,796,000, of which not to 

exceed $250,000,000 shall remain available until 

September 30, 2020; of which not to 

exceed $10,000,000 shall remain available until 

expended for acquisition of equipment and 

construction, repair and renovation of facilities; of 

which not to exceed $1,000,000 shall remain 

available until September 30, 2021, for research; of 

which not to exceed $20,000 shall be for official 

reception and representation expenses: Provided, 

That not later than 30 days after the end of each 

quarter, the Internal Revenue Service shall submit a 

report to the Committees on Appropriations of the 

House of Representatives and the Senate and the 

Comptroller General of the United States detailing 

the cost and schedule performance for its major 

information technology investments, including the 

purpose and life-cycle stages of the investments; the 

reasons for any cost and schedule variances; the risks 

of such investments and strategies the Internal 

Revenue Service is using to mitigate such risks; and 

the expected developmental milestones to be achieved 

and costs to be incurred in the next quarter: Provided 

further, That the Internal Revenue Service shall 

include, in its budget justification for fiscal year 

2019, a summary of cost and schedule performance 

information for its major information technology 

systems: Provided further, That of the funds 

provided under this paragraph, $4,155,796,000 is 

provided to meet the terms of section 251(b)(2) of 

the Balanced Budget and Emergency Deficit 

Control Act of 1985, as amended. 

In addition, not less than $156,928,000 for tax 

activities under this heading, including tax 

compliance to address the Federal tax 

gap: Provided, That such amount is additional new 

budget authority for tax activities, including tax 

compliance to address the Federal tax gap, as 

specified for purposes of section 251(b)(2) of the 

Balanced Budget and Emergency Deficit Control 

Act of 1985, as amended. 

Note.—A full-year 2018 appropriation for this 

account was not enacted at the time the budget was 

prepared; therefore, the budget assumes this account 

Increasing two-year authority from the 

$50 million cap in FY 2017 to $250 

million to correspond with the 

availability of the closely-linked BSM 

appropriation; to provide sufficient 

time for a robust IT lifecycle process 

including vision, strategy, solution, 

design, and development, thereby 

improving contracting outcomes; 

consistent with a recent 

recommendation from the Treasury 

Inspector General for Tax 

Administration (TIGTA), “While 

Improvements Continue in Contract 

Negotiation Methods and Management 

Practices, Inconsistencies Need to Be 

Addressed.” 

Language required for the proposed 

program integrity cap adjustment. 

More information about the cap 

adjustment can be found in section 4.1 

– Appropriations Detail Table with 

Program Integrity Cap Adjustment of 

the Appendix and Budget Process 

Chapter of the FY 2019 President’s 

Budget. 
IRS-21 

is operating under the Continuing Appropriations 

Act, 2018 (Division D of P.L. 115–56, as amended). 

The amounts included for 2018 reflect the annualized 

level provided by the continuing resolution. 

BUSINESS SYSTEMS MODERNIZATION 

For necessary expenses of the Internal Revenue 

Service's business systems modernization 

program, $110,000,000, to remain available until 

September 30, 2021, for the capital asset acquisition 

of information technology systems, including 

management and related contractual costs of said 

acquisitions, including related Internal Revenue 

Service labor costs, and contractual costs associated 

with operations authorized by 5 U.S.C. 

3109: Provided, That not later than 30 days after the 

end of each quarter, the Internal Revenue Service 

shall submit a report to the Committees on 

Appropriations of the House of Representatives and 

the Senate and the Comptroller General of the United 

States detailing the cost and schedule performance 

for CADE 2 and Modernized e-File information 

technology investments, including the purposes and 

life-cycle stages of the investments; the reasons for 

any cost and schedule variances; the risks of such 

investments and the strategies the Internal Revenue 

Service is using to mitigate such risks; and the 

expected developmental milestones to be achieved 

and costs to be incurred in the next quarter. 

Note.—A full-year 2018 appropriation for this 

account was not enacted at the time the budget was 

prepared; therefore, the budget assumes this account 

is operating under the Continuing Appropriations 

Act, 2018 (Division D of P.L. 115–56, as amended). 

The amounts included for 2018 reflect the annualized 

level provided by the continuing resolution. 

ADMINISTRATIVE PROVISIONS –

INTERNAL REVENUE SERVICE

(INCLUDING TRANSFER OF FUNDS)

SEC. 101. Not to exceed 10 percent of any 

appropriation made available in this Act to the 

Internal Revenue Service may be transferred to any 

Increasing transfer authority between 

IRS appropriations accounts from 5 

percent to 10 percent, consistent with 
IRS-22 

other Internal Revenue Service appropriation upon 

the advance notification of the Committees on 

Appropriations. 

SEC. 102. The Internal Revenue Service shall 

maintain an employee training program, which shall 

include the following topics: taxpayers' rights, 

dealing courteously with taxpayers, cross-cultural 

relations, ethics, and the impartial application of tax 

law. 

SEC. 103. The Internal Revenue Service shall 

institute and enforce policies and procedures that will 

safeguard the confidentiality of taxpayer information 

and protect taxpayers against identity theft. 

SEC. 104. Funds made available by this or any other 

Act to the Internal Revenue Service shall be available 

for improved facilities and increased staffing to 

provide sufficient and effective 1–800 help line 

service for taxpayers. The Commissioner shall 

continue to make improvements to the Internal 

Revenue Service 1–800 help line service a priority 

and allocate resources necessary to enhance the 

response time to taxpayer communications, 

particularly with regard to victims of tax-related 

crimes. 

SEC. 105. The Internal Revenue Service shall issue a 

notice of confirmation of any address change relating 

to an employer making employment tax payments, 

and such notice shall be sent to both the employer's 

former and new address and an officer or employee 

of the Internal Revenue Service shall give special 

consideration to an offer-in-compromise from a 

taxpayer who has been the victim of fraud by a thirdparty payroll tax preparer. 

SEC. 106. None of the funds made available under 

this Act may be used by the Internal Revenue Service 

to target citizens of the United States for exercising 

any right guaranteed under the First Amendment to 

the Constitution of the United States. 

SEC. 107. None of the funds made available in this 

Act may be used by the Internal Revenue Service to 

target groups for regulatory scrutiny based on their 

ideological beliefs. 

SEC. 108. Section 9503(a) of title 5, United States 

Code, is amended by striking the clause "Before 

September 30, 2013" and inserting "before September 

30, 2022". 

recent recommendations from TIGTA 

(Audit #201620014). 

Restoring Streamlined Critical Pay 

authority through September 30, 2022. 
IRS-23 

SEC. 109. Section 9503(a)(5) of title 5, United States 

Code, is amended by inserting before the semicolon 

the following: 

", but are renewable for an additional two years, 

based on a critical organizational need". 

SEC. 110. Notwithstanding any Congressional 

notification requirements for a reprogramming of 

funds in this Act, funds provided in this Act for the 

Internal Revenue Service shall be available for 

obligation and expenditure through a 

reprogramming of funds that augments or reduces 

existing programs, projects, or activities by up 

to $10,000,000 without prior Congressional 

notification of such action. 

Providing authority to reprogram up to 

$10 million within appropriations 

accounts without formal notification 

procedures. This increase will allow 

the IRS to allocate funds to highest 

priority needs at end of fiscal year, 

including infrastructure, and respond to 

late-breaking workload and program 

demand changes. 
IRS-24 

1E – Legislative Proposals 

Program Integrity Cap Adjustment 

In addition to the base appropriations request of $11.135 billion, the Budget proposes a 

$362 million discretionary program integrity cap adjustment in FY 2019 to fund new and 

continuing investments in expanding and improving the effectiveness and efficiency of the 

IRS’s overall tax enforcement program. The Budget proposes $205 million for the 

Enforcement account and $157 million for the Operations Support account. It also proposes 

additional adjustments in future years to fund new initiatives and inflation. The proposed 

investments will generate approximately $44 billion in additional revenue over 10 years and 

will cost about $15 billion for net savings of $29 billion. Notably, this ROI is likely 

understated because it does not reflect the effect that enhanced enforcement has on deterring 

non-compliance. The deterrent effect helps to ensure the continued payment of over 

$3 trillion in taxes voluntarily paid each year. More information about the cap adjustment is 

found in section 4.1 – Appropriations Detail Table with Program Integrity Cap Adjustment of 

the Appendix and in the Budget Process Chapter of the FY 2019 President’s Budget. 

Streamlined Critical Pay Authority 

The Budget proposes to reinstate Streamlined Critical Pay (SCP) authority for the IRS 

through September 30, 2022. The authority to make new SCP appointments expired 

September 30, 2013. This authority allowed the IRS to recruit and retain IT and other senior 

professionals and was limited to 40 positions. The IRS no longer employs any SCP appointees. 

The last SCP appointment expired on September 29, 2017. Without the renewal of SCP the 

IRS will continue to face challenges recruiting and retaining top talent in FY 2019, especially 

IT professionals who can help protect taxpayer data from cyber-attacks and who can assist 

with modernizing the IRS's IT infrastructure. To mitigate this issue, the IRS has carefully 

considered the Office of Personnel Management (OPM) existing government-wide Critical 

Position Pay (CPP) authority as an alternative to SCP. However, the CPP structure is limited. 

Key benefits of SCP are: 

• Shortened Approval Timeline: SCP appointments approved by the IRS 

Commissioner had an approval timeline of four to six weeks compared to the CPP 

approval process, which requires concurrence at the Secretary of the Treasury level 

and approval by OPM and has an approval timeline of four to six months. 

• Streamlined Justification Process: The justification process is less extensive for SCP 

appointments, decreasing the amount of time an SES position is vacant. Currently, 

CPP SES positions can be vacant for several months to a year before being able to 

justify obtaining a CPP designation. 

• Expanded Salary Cap: Under SCP authority, the IRS could pay up to the 

Vice President’s salary ($240,100 in 2017). Under the CPP authority, the EX-I salary 

would cap at $207,800 in 2017. 
IRS-25 

According to TIGTA report 2015-IE-R001, The Internal Revenue Service’s Use of Its 

Streamlined Critical Pay Authority, the IRS ran the SCP program effectively. 

Correctable Error Authority 

The Budget proposes to provide the IRS with greater flexibility to address errors on taxpayer 

returns. Under current law, when the IRS identifies certain mathematical and clerical errors 

or other specific irregularities on returns during processing, it automatically adjusts the return 

for the taxpayer. At various times, Congress has expanded this authority on a case-by-case 

basis. The IRS would be able to use its resources more effectively and efficiently through 

reducing improper payments and cutting down on the need for costly audits if Congress were 

to expand this authority to allow the IRS to correct returns for specific errors. The 

Administration’s Budget proposes to permit the IRS to correct a taxpayer’s return in cases 

where (1) the information provided by the taxpayer does not match the information contained 

in government databases; (2) the taxpayer has exceeded the lifetime limit for claiming a 

deduction or credit; or (3) the taxpayer has failed to include with his or her return certain 

documentation that is required by statute. 

Increase Oversight of Paid Tax Return Preparers 

Since 2011, the IRS has been blocked from enforcing regulations on the grounds that the 

IRS’s authority to regulate practitioners is insufficient to permit regulation of tax return 

preparers who do not practice or represent taxpayers before an office of the Department of the 

Treasury. The Budget requests that the IRS be granted the authority to require minimum 

standards for an estimated 400,000 paid tax return preparers currently without credentials. 

Incompetent and dishonest return preparers increase collection costs, reduce revenues, 

disadvantage taxpayers by potentially subjecting them to penalties and interest as a result of 

incorrect returns, and undermine confidence in the tax system. The proposal would explicitly 

provide that the Secretary of the Treasury has the authority to regulate all paid tax return 

preparers. 

More information about these proposals, outlay effects, and other tax policy issues can be 

found in the Federal Receipts and Budget Process chapters of the President’s Budget. 

 
IRS-26 

1F - IRS Use of Evidence and Evaluation 

The IRS continues to improve program performance by applying existing evidence about 

what works and by using research and innovation to improve program delivery. 

Significant Accomplishments 

Reducing Taxpayer Burden and Improving Compliance 

 Post-Filing Model: The IRS has developed a model of the post-filing interactions 

between taxpayers and the IRS, accounting for various post-filing treatment streams 

with a focus on taxpayer burden, IRS costs, cycle time, and compliance outcomes. 

The IRS uses the model to inform the campus exam plan along with the design and 

analysis of non-filer outreach and enforcement treatments. The IRS is updating the 

underlying research study based on more recent taxpayer experience and is extending 

it to include corporate and partnership taxpayers. 

 Behavioral Economics Research: The IRS is engaged in a set of pilots and research 

studies to improve its understanding of taxpayer behavior. These studies include 

outreach programs encouraging compliant participation in the Earned Income Tax 

Credit and the American Opportunities Tax Credit, filing compliance, and payment 

compliance. 

Highest Priorities 

Improving the Effectiveness of the IRS 

 Evaluation of Statistics of Income (SOI) Major Programs: The IRS SOI office will 

continue evaluations of its income tax products, determine projected future needs, and 

identify areas of potential cost savings. Cost-saving measures include replacing or 

supplementing statistical files with information from IRS administrative records as 

well as identifying statistical files that could be discontinued. 

 Creating More Accessible Statistics: SOI will continue to implement its 

comprehensive plan to modernize its public communications efforts. Completed 

initiatives include extensive data visualizations, social media outreach, and redesigned 

Tax Stats web pages. These efforts will provide more accessible data to the public and 

assist SOI in leading OMB data dissemination requirements. 

 Redesign of Business Publications: SOI will complete a redesign of its business tax 

publications, which include data published for corporations and partnerships. The 

redesign will ensure compliance with new disclosure guidelines set forth in Tax 

Information Security Guidelines for Federal, State and Local Agencies (Publication 

1075). SOI is working with customers, through public meetings, to ensure that the 

redesigned publications provide useful, comprehensive statistical data on businesses to 

the public while protecting taxpayer privacy. Researchers use this data extensively in 

evaluating current and proposed tax policy and estimating revenue. Additionally, the 

data is used by businesses for a wide range of analytics that support planning and 

marketing.
IRS-27 

 Comprehensive Taxpayer Attitude Survey: SOI assumed responsibility for the Annual 

Comprehensive Taxpayer Attitude Survey, formerly conducted by the IRS Oversight 

Board. The survey collects information from a sample of taxpayers to gain insight 

into taxpayer views on voluntary compliance and IRS enforcement and taxpayer 

services. 

 Submission Processing Center Realignment: In conjunction with the closure of select 

IRS Submission Processing Centers, SOI is leading a Research, Applied Analytics 

& Statistics (RAAS)-wide effort to realign the processing of its statistical samples 

among the remaining centers. This includes a comprehensive effort to realize cost 

savings while still maintaining the quality and integrity of data collected for SOI’s 

statistical samples. 

 SOI Releases: In FY 2017, SOI released more than 200 additional tables containing 

detailed information on a wide range of topics. These included the Tax Year 2014 

Individual Income Tax Percentile tables. The percentile tables present the number of 

returns, adjusted gross income, selected income items, credits, total income tax, and 

average tax rates tabulated by selected percentile classes and provide useful 

information on individual taxpayers to the public. For Tax Year 2014, the percentile 

tables include a new classification at the .001 percentile level – which in 2014 

represented the top 1,396 returns. SOI’s other releases include updated statistical 

tables for sole proprietorships, estates, tax-exempt organizations and bonds, and 

international taxpayers and entities. 

 
IRS-28 

Section II – Budget and Performance Plan 

Treasury Strategic Objectives and Agency Priority Goals 

The Budget supports the following Department of the Treasury Strategic Objectives for FY 

2018 – 2022 and Agency Priority Goals for FY 2018 – 2019 for all appropriations: 

 Strategic Goal 1: Boost U.S. Economic Growth, Strategic Objective 1.1: Tax Law 

Implementation: Administer tax law to better enable all taxpayers to meet their 

obligations, while protecting the integrity of the tax system. 

 Strategic Goal 4: Transform Government-wide Financial Stewardship, Strategic 

Objective 4.1: Financial Data Access/Use: Increase the access and use of federal 

financial data to strengthen government-wide decision-making, transparency, and 

accountability. 

 Strategic Goal 5: Achieve Operational Excellence, Strategic Objectives 5.1 – 5.3: 

o 5.1 Workforce Management: Foster a culture of innovation to hire, engage, 

develop, and optimize a diverse workforce with the competencies necessary to 

accomplish our mission. 

o 5.2 Treasury Infrastructure: Better enable mission delivery by improving the 

reliability, security, and resiliency of Treasury’s infrastructure. 

o 5.3 Customer Value: Improve customer value by increasing the quality and 

lowering the cost of Treasury’s products and services. 

 Agency Priority Goal (aligned to strategic objective 1.1): Reduce the amount of 

unprotected identity theft tax refunds paid by two percent by December 21, 2019. 

Taxpayer Services 

Appropriation Description 

The Taxpayer Services appropriation provides funding for taxpayer service activities and 

programs. This includes printing forms and publications, processing tax returns and related 

documents, offering filing and account services, taxpayer assistance, and providing taxpayer 

advocacy services. 

The Taxpayer Services budget request for FY 2019 is $2,241,000,000 in direct appropriations 

and 24,668 FTE. This is a decrease of $108,688,000, or 4.63 percent, and 2,309 fewer or 

8.56 percent FTE than the FY 2018 Annualized Continuing Resolution level of 

$2,349,688,000 and 26,977 FTE. 
IRS-29 

2.1 – Budget Adjustments Table 

Dollars in thousands 

Taxpayer Services 

Summary of Proposed FY 2019 Request FTE Amount 

FY 2018 Annualized CR Level 26,977 $2,349,688 

Changes to Base 

Maintaining Current Levels (MCLs) $13,115 

Pay Annualization 9,697 

Non-Pay Inflation Adjustment 3,418 

Efficiencies/Savings (128) (6,695) 

Increase e-File Savings (128) (6,695) 

Space Optimization 

Subtotal FY 2019 Changes to Base (128) $6,420 

FY 2019 Current Services 26,849 $2,356,108 

Program Changes 

Program Decreases 

 Actions to Achieve Workforce Management Goals (2,307) (133,134) 

Subtotal FY 2019 Program Decreases (2,307) ($133,134) 

Program Increases 

Support Taxpayer Services and Online Account Activities 126 $18,026 

Subtotal FY 2019 Program Increases 126 $18,026 

Total FY 2019 Budget Request 24,668 $2,241,000 

See footnotes in 1.1 – Appropriations Detail Table 
IRS-30 

2.2 – Operating Levels Table 

Dollars in thousands 

Taxpayer Services 

Object Classification 

FY 2017 

Enacted 

FY 2018 

Annualized CR 

FY 2019 

Request 

11.1 Full-Time Permanent Positions 1,550,096 1,489,599 1,404,152 

11.3 Other than Full-Time Permanent Positions 42,746 31,576 31,727 

11.5 Other Personnel Compensation 64,728 71,928 72,297 

11.8 Special Personal Services Payments 1 

11.9 Personnel Compensation (Total) 1,657,571 1,593,103 1,508,176 

12.1 Personnel Benefits 605,966 550,994 515,458 

13.0 Benefits to Former Personnel 28,829 26,818 26,946 

Total Personnel and Compensation Benefits $2,292,366 $2,170,915 $2,050,580 

21.0 Travel 9,332 11,204 11,727 

22.0 Transportation of Things 678 633 648 

23.3 Communications, Utilities, & Misc 1,254 1,187 1,216 

24.0 Printing & Reproduction 8,964 9,410 9,610 

25.1 Advisory & Assistance Services 37,073 40,590 49,514 

25.2 Other Services 7,369 13,568 13,943 

25.3 Purchase of Goods & Services from Govt. Accounts 57,389 59,051 60,483 

25.4 Operation & Maintenance of Facilities 62 50 51 

25.7 Operation & Maintenance of Equipment 83 234 240 

26.0 Supplies and Materials 4,643 6,249 6,378 

31.0 Equipment 281 119 121 

32.0 Land and Structures 

41.0 Grants, Subsidies 35,890 35,990 35,990 

42.0 Insurance Claims & Indemnities 370 488 499 

Total Non-Personnel $163,388 $178,773 $190,420 

New Appropriated Resources $2,455,754 $2,349,688 $2,241,000 

Budget Activities 

Pre-filing Taxpayer Assistance & Education 607,043 603,424 607,753 

Filing & Account Services 1,848,711 1,746,264 1,633,247 

New Appropriated Resources $2,455,754 $2,349,688 $2,241,000 

FTE 28,692 26,977 24,668 

See footnotes in 1.1 – Appropriations Detail Table 
IRS-31 

2.3 – Appropriation Detail Table

2A – Pre-Filing Taxpayer Assistance and Education ($607,753,000 in direct 

appropriations, and an estimated $1,237,000 from reimbursable programs). This budget 

activity funds direct labor and non-labor expenses to assist with tax return preparation, 

including tax law interpretation, publication, production, and advocate services. The program 

activities include: 

 Pre-Filing Services Management supports headquarters staffing and support for 

Taxpayer Advocate Service and Customer Assistance Relationship and Education 

(CARE) program activities. CARE provides pre-filing taxpayer assistance and 

education. 

 Taxpayer Communication and Education researches customer needs; develops and 

manages educational programs; establishes partnerships with stakeholder groups; and 

disseminates tax information to taxpayers and the general public through a variety of 

media, including publications and mailings, websites, broadcasting, and advertising. 

 Media and Publications develops and produces notices, forms, and publications for 

printed and electronic tax materials, and provides media production services to 

taxpayers. 

 Taxpayer Advocacy provides advocate services to taxpayers by identifying the 

underlying causes of taxpayer problems and participating in the development of 

systematic and/or procedural remedies. 

 Account Management and Assistance – Field Assistance provides face-to-face 

assistance, education, and compliance services to taxpayers. It includes return 

preparation, answering tax questions, resolving account and notice inquiries, and 

supplying forms and publications to taxpayers. 

 Taxpayer Advocate Case Processing provides advocate services to taxpayers to 

resolve taxpayer problems through prompt identification, referral, and settlement. 

Dollars in thousands

T axpayer Services

Appropriated Resources

FTE AM OUNT FTE AM OUNT FTE AM OUNT FTE AM OUNT FTE A M OUNT

N ew A ppro priated R eso urces:

Pre-Filing Taxpayer Assistance and Education 4,700 $607,043 4,451 603,424 4,460 607,753 9 4,329 0.20% 0.72%

Filing and Account Services 23,992 1,848,711 22,526 1,746,264 20,208 1,633,247 (2,318) (113,017) -10.29% -6.47%

Subto tal N ew A ppro priated 

Resources 28,692 $ 2,455,754 26,977 $ 2,349,688 24,668 $ 2,241,000 (2,309) ($ 108,688) -8.56% -4.63%

Other Resources:

Reimbursables 708 62,798 895 74,359 423 36,756 (472) (37,603) -52.74% -50.57%

User Fees 71 3,900 75 68,100 71 67,900 (4) (200) -5.33% -0.29%

Recovery from Prior Years 1

Unobligated Balances from Prior Years 10,250 827 45,900 5,000 (827) (40,900) -100.00% -89.11%

Subtotal Other Resources 779 $ 76,949 1,797 $ 188,359 494 $ 109,656 (1,303) ($ 78,703) -72.51% -41.78%

T o tal B udgetary R eso urces 29,471 $ 2,532,703 28,774 $ 2,538,047 25,162 $ 2,350,656 (3,612) ($ 187,391) -12.55% -7.38%

1See footnotes in 1.1 – Appropriations Detail Table

% C hange

F Y 2018 to F Y 2019 

Request

F Y 2017

Enacted

Change

F Y 2018

Annualized CR

F Y 2019

Request

F Y 2018 to F Y 

2019 R equest
IRS-32 

 W&I HQ Management and Administration provides staffing, training, and direct 

support for Wage and Investment management activities of strategic planning, 

communications and liaison, finance, human resources, equity, diversity and inclusion, 

business modernization, and embedded training. 

Description of Performance 

In FY 2017, the IRS delivered 93.1 percent of the Critical Individual Filing Season Tax 

Products to the public timely (defined as no later than the fifth workday of January) exceeding 

the target of 89 percent. There were no expired provisions for this year as there had been the 

preceding year and the IRS did not have to implement new tax legislation, which allowed 

Media & Publications (M&P) to finish products earlier than anticipated. M&P prioritized 

critical tax products to ensure they would be available to taxpayers by the start of filing 

season. For FY 2018 and FY 2019, the IRS will maintain a target of 89 percent because of 

the significant workload resulting from the Tax Cuts and Jobs Act (Public Law 115-97). 

In FY 2017, the IRS Timeliness of Critical TE/GE and Business Filing Season Tax products 

to the Public was 96.7 percent, exceeding the target of 91 percent. To meet future targets, the 

IRS will plan, monitor, and coordinate all product development and delivery activities. The 

IRS also will continue to evaluate processes so that mitigation strategies can be implemented. 

In FY 2018 and FY 2019, the IRS expects to achieve a target of 91 percent for Critical Tax 

Exempt & Government Entities and Business Tax Products to the Public. For FY 2018 and 

FY 2019, the IRS will maintain a target of 91 percent because of the significant workload 

resulting from the Tax Cuts and Jobs Act (Public Law 115-97). 

Beginning in FY 2017, the Taxpayer Self Assistance Rate was replaced with a revised metric, 

the Enterprise Self Assistance Participation Rate. This metric reports the percentage of 

taxpayer requests resolved using self-assisted automated services. The new measure reached 

79 percent and was used as an indicator for FY 2017. The revised metric now includes 

additional applications including Get Transcript and payment applications such as Direct Pay

and Online Payment Agreement. As the IRS provides new self-service applications to the 

public, they will be added to the list of applications included in the Enterprise Self Assistance 

Participation Rate. The metric will continue as an indicator in FY 2018 and FY 2019. 

 
IRS-33 

FY 2019 Changes by Budget Activity 

Dollars in thousands 

Pre-Filing Taxpayer Assistance & Education FTE Amount 

FY 2018 Annualized CR Level 4,451 $603,424 

Changes to Base 

Maintaining Current Levels (MCLs) $3,260 

Pay Annualization 2,568 

Non-Pay 692 

Subtotal FY 2019 Changes to Base $3,260 

FY 2019 Current Services 4,451 $606,684 

Program Changes 

Program Increases 

Support Taxpayer Services and Online Account Activities 9 1,069 

Subtotal FY 2019 Program Increases 9 $1,069 

Total FY 2019 Request 4,460 $607,753 

See footnotes in 1.1 – Appropriations Detail Table 

2.1.1 – Budget and Performance Report and Plan 

2B – Filing and Account Services ($1,633,247,000 in direct appropriations, an estimated 

$35,519,000 from reimbursable programs, and an estimated $67,900,000 from user fees): 

This budget activity funds direct labor and non-labor expenses that provide filing and account 

services to taxpayers, process paper and electronically-submitted tax returns, issue refunds, 

and maintain taxpayer accounts. The IRS continues to make progress in decreasing paper 

returns (more than 90 percent of individual returns were filed electronically during the 

2017 filing season) and increasing the use of electronic filing and payment methods. The 

program activities include: 

 Filing and Account Services Management administers filing and account services 

programs. 

Dollars in thousands

Pre-Filing Taxpayer Assistance & Education FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019

Resource Level Actual Actual Actual Actual Enacted Annualized CR Request

Appropriated Resources1 $586,896 $595,168 $609,196 $609,445 $607,043 $603,424 $607,753

Reimbursable Resources2 45 51 13 4 1,178 1,237

User Fees2 6,400 22,400 4,141

Budget Activity Total $593,296 $617,613 $613,388 $609,458 $607,047 $604,602 $608,990

1

The FY 2013 - FY 2017 appropriated resources line represents the approved operating plan including any inter-BAC transfers and inter-appropriation transfers.

2

The FY 2013 - FY 2017 columns represent realized resources for reimbursables and user fees.

Pre-Filing Taxpayer Assistance & Education FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2017 FY 2018 FY 2019

Measure Actual Actual Actual Actual Actual Target Target Target

Timeliness of Critical Filing Season Tax Products to the Public (Ot) 58.9% 99.1% 89.0% 92.5% 93.1% 89.0% 89.0% 89.0%

Timeliness of Critical TE/GE & Business Tax Products to the Public 

(Ot) 83.6% 98.7% 92.6% 98.0% 96.7% 91.0% 91.0% 91.0%

Enterprise Taxpayer Self-Assistance Rate (E) (L)1 83.3% 84.7% 88.7% 89.0% 79.0% Indicator Indicator Indicator 

Key: Oe - Outcome Measure, E - Efficiency Measure, Ot - Output/Workload Measure, and L - Long Term Goal

1

Starting in FY 2017, the IRS modified the Taxpayer Self Assistance Rate measure to include additional self-service channels. As new self-assistance applications are provided to the 

public, they will be added to the methodology. The IRS saw taxpayer behavior changes in 2017 due to the PATH Act (re: refund hold) and expects to see additional impacts in 2018 due to tax 

reform; in addition, the IRS continues to evaluate the impact of changes to the web services measure.
IRS-34 

 Submission Processing processes paper and electronically-submitted tax returns and 

supplemental documents, accounts for tax revenue, processes information documents, 

and issues refunds and tax notices. 

 Account Management and Assistance – Electronic/Correspondence Assistance

provides education and assistance to taxpayers and resolves accounts and notice 

inquiries through telephone, paper, and internet correspondence. 

 Electronic Products and Services Support (EPSS) provides centralized operations and 

support capabilities for the IRS suite of electronic products, including e-help desk, 

technology support, and operations support. 

 Electronic Tax Administration (ETA) markets and administers electronic tax 

administration products and services. 

 Business Performance Lab initiates, recommends, and manages systemic solutions for 

the detection and treatment of improper refunds while ensuring effective treatment for 

payment of valid refund claims; leads the development of innovative business 

processes and technology solutions and represents Return Integrity & Compliance 

Services (RICS) interests in support of the service-wide revenue protection strategy. 

 Joint Operations Center (JOC) provides service, support, and technology for 

telephone, correspondence, and electronic media inquiries; real time monitoring and 

routing of inbound calls; monitoring of Customer Service Representative accuracy; 

and management of the enterprise telephone database. 

Description of Performance 

Millions of individual and business taxpayers file their returns electronically. In FY 2017, the 

IRS achieved an 86.9 percent individual e-file rate and a 52.9 percent business e-file rate, 

falling slightly short of 87 percent individual e-file rate target and exceeding the 51 percent 

target for business returns. The overall benefits of e-file (i.e., faster refunds, greater accuracy, 

secure and confidential submission, and quick confirmation) continue to drive performance. 

The IRS also is promoting the benefits of e-filing via social media. The IRS will increase the 

individual e-file rate target to 88 percent and 89 percent for FY 2018 and FY 2019, 

respectively. The business e-file rate target will be increased to 54 percent for FY 2018 and 

56 percent for FY 2019. 

In FY 2017, Customer Accuracy – Tax Law was 96.7 percent, exceeding the target of 

95 percent. This measure reflects the percentage of correct answers given by a live assistor on 

toll-free tax law inquiries. The IRS will continue to monitor results through data driven 

analysis of reports obtained from the Embedded Quality Review System (EQRS). The IRS 

will continue to hold weekly conference calls throughout the year to discuss quality 

defects/errors and procedures to ensure the target is met. For FY 2018 and FY 2019, the IRS 

will keep the tax law accuracy target at 95 percent, although the Tax Cut and Jobs Act (Public 

Law 115-97) may affect performance. 

In FY 2017, the IRS correctly answered 96 percent of account questions over the telephone, 

exceeding the target of 95 percent. The IRS expects to maintain high performance on the 
IRS-35 

Customer Accuracy – Accounts (Phones) and achieve the FY 2018 and FY 2019 target of 

95 percent. 

In FY 2017, the IRS Customer Contacts Resolved per Staff Year reached 25,535. This 

measure includes activities such as automated and assistor calls answered and web services 

completed. Due to modifications made to the Taxpayer Self-Assistance measure for FY 2017, 

several components of the Customer Contacts Resolved Per Staff Year measure changed, 

including: the way IRS counts transcripts, from “requested” to now counting “delivered;” the 

addition of Get Transcript; and the discontinuation of Electronic Interactions. Taxpayer 

behavior changes were observed in 2017 following the PATH Act (re: refund hold), and the 

IRS expects to see additional effects in 2018 and in 2019 due to tax reform. The IRS also 

continues to evaluate the impact of changes to the web services measure in FY 2017. The 

measure will be rebaselined for FY 2018. 

In FY 2017, the Customer Service Representative Level of Service (LOS) was 77.1 percent, 

exceeding the target of 64 percent. Level of Service was better than expected because fewer 

taxpayers called the IRS. Overall, the volume of callers to IRS toll free customer service was 

29 percent lower compared to FY 2016. IRS attributes the reduction in volume to the “Get 

Ready” communication campaign delivered throughout the fall of 2016. The IRS is using this 

approach in FY 2018. The IRS will continue to create detailed forecasts of expected 

telephone and correspondence demand and will monitor those projections against actual 

results. Staff will be shifted between telephones and paper processing as needed to achieve 

the planned goals. The FY 2018 LOS target is 75 percent. This target includes funding from 

discretionary base appropriations and $58 million from user fees. The FY 2019 target is 

47 percent and assumes at least $58 million from user fees. The 2019 filing season LOS is 

projected to be 55 percent. These targets take into account the potential impact of the Tax 

Cuts and Jobs Act (Public Law 115-97) on demand, which is still being evaluated. The IRS 

will develop more detailed user fee spend plans in FY 2018 and FY 2019 to address enacted 

funding levels and respond to changes in requirements. 

In FY 2017, Refund Timeliness reached 98.4 percent, exceeding the target of 97 percent as 

the number of paper refunds continued to decline as more taxpayers file electronically. 

During FY 2017, the IRS received 201 million tax returns and issued refunds and outlays 

totaling $467 billion. The IRS will continue to monitor individual return cycles and 

inventories to ensure targets are met. For FY 2018 and FY 2019, the IRS expects to achieve a 

target of 97 percent. 
IRS-36 

FY 2019 Changes by Budget Activity 

Dollars in thousands 

Filing and Account Services FTE Amount 

FY 2018 Annualized CR Level 22,526 $1,746,264 

Changes to Base 

Maintaining Current Levels (MCLs) $9,855 

Pay Annualization 7,129 

Non-Pay 2,726 

Efficiency/Savings (128) ($6,695) 

Increase e-File Savings (128) (6,695) 

Subtotal FY 2019 Changes to Base (128) $3,160 

FY 2019 Current Services 22,398 $1,749,424 

Program Changes 

Program Decreases 

Actions to Achieve Workforce Management Goals (2,307) (133,134) 

Subtotal FY 2019 Program Decreases (2,307) ($133,134) 

Program Increases 

Support Taxpayer Services and Online Account Activities 117 16,957 

Subtotal FY 2019 Program Increases 117 $16,957 

Total FY 2019 Request 20,208 $1,633,247 

See footnotes in 1.1 – Appropriations Detail Table 

2.1.2 – Budget and Performance Report and Plan 

Filing and Account Services FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019

Resource Level Actual Actual Actual Actual Enacted Annualized CR Request

Appropriated Resources1 $1,532,963 $1,550,027 $1,564,488 $1,712,511 $1,848,711 $1,746,264 $1,633,247

Reimbursable Resources2 37,535 28,555 30,147 34,905 62,794 73,181 35,519

User Fees2 184,599 160,342 40,553 69,987 3,900 68,100 67,900

Budget Activity Total $1,755,097 $1,738,924 $1,635,188 $1,817,403 $1,915,405 $1,887,545 $1,736,666

2

The FY 2013 - FY 2017 columns represent realized resources for reimbursables and user fees.

Filing and Account Services FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2017 FY 2018 FY 2019

Measures Actual Actual Actual Actual Actual Target Target Target

Percent Individual Returns Processed Electronically (Oe) (L) 82.5% 84.1% 85.3% 86.4% 86.9% 87.0% 88.0% 89.0%

Percent of Business Returns Processed Electronically (Oe) (L) 40.2% 43.1% 47.0% 50.0% 52.9% 51.0% 54.0% 56.0%

Customer Accuracy - Tax Law (Phones) (Ot) 95.7% 95.0% 95.0% 96.4% 96.7% 95.0% 95.0% 95.0%

Customer Accuracy - Accounts (Phones) (Ot) 96.0% 96.2% 95.5% 96.1% 96.0% 95.0% 95.0% 95.0%

Customer Contacts Resolved per Staff Year (E)

12 20,767 21,018 26,245 28,497 25,535 Baseline Baseline TBD

Customer Service Representative Level of Service (Oe) (L)

34 60.5% 64.4% 38.1% 53.4% 77.1% 64.0% 75.0% 47.0%

Refund Timeliness - Individual (Paper) (Ot) 99.0% 98.7% 98.8% 98.7% 98.4% 97.0% 97.0% 97.0%

Key: Oe - Outcome Measure, E - Efficiency Measure, Ot - Output/Workload Measure, and L - Long Term Goal

3

Beginning in FY 2013, targets include an increase in base user fees. 

4

Based on an updated assumption of IRS's FY 2018 funding level, expected LOS is 75%.

2

Starting in FY 2017, the IRS modified the Customer Contacts Resolved per Staff Year (CCRPSY) measure to include additional self-service channels. As new self-assistance applications are 

provided to the public, they will be added to the methodology. The IRS saw taxpayer behavior changes in 2017 due to the PATH Act (re: refund hold) and expects to see additional impacts in 2018 

due to tax reform; in addition, the IRS continues to evaluate the impact of changes to the web services measure. CCRPSY will be rebaselined for FY 2018.

Dollars in thousands

1

The FY 2013 - FY 2017 appropriated resources line represents the approved operating plan including any inter-BAC transfers and inter-appropriation transfers.

1

Due to modifications made to the Taxpayer Self-Assistance Rate measure for FY 2017, several components of the Customer Contacts Resolved Per Staff measure will change. As a result of these 

changes, the measure will be baselined in FY 2017.
IRS-37 

Enforcement 

Appropriation Description 

The Enforcement appropriation provides funding for the examination of tax returns, both 

domestic and international; administrative and judicial settlement of taxpayer appeals of 

examination findings; technical rulings; monitoring of employee pension plans; determination 

of qualifications of organizations seeking tax-exempt status; examination of tax returns of 

exempt organizations; enforcement of statutes relating to detection and investigation of 

criminal violations of the internal revenue laws; identification of underreporting of tax 

obligations; securing of unfiled tax returns; and collection of unpaid accounts. 

The Enforcement budget request for FY 2019 is $4,628,204,000 in direct appropriations and 

34,662 FTE, excluding the proposed program integrity cap adjustment. This is an increase of 

$21,208,000, or 0.46 percent above the FY 2018 Annualized Continuing Resolution level of 

$4,606,996,000 and 34,662 FTE. 

 
IRS-38 

2.1 – Budget Adjustments Table 

Dollars in thousands 

Enforcement 

Summary of Proposed FY 2019 Request FTE Amount 

FY 2018 Annualized CR Level 34,662 $4,606,996 

Changes to Base 

Maintaining Current Levels (MCLs) $26,598 

Pay Annualization 21,035 

Non-Pay Inflation Adjustment 5,563 

Subtotal FY 2019 Changes to Base $26,598 

FY 2019 Current Services 34,662 $4,633,594 

Program Changes 

Program Decreases 

Actions to Achieve Workforce Management Goals (5,390) 

Subtotal FY 2019 Program Decreases ($5,390) 

Total FY 2019 Budget Request 34,662 $4,628,204 

See footnotes in 1.1 – Appropriations Detail Table
IRS-39 

2.2 – Operating Levels Table 

Dollars in thousands 

Enforcement 

Object Classification 

FY 2017 

Enacted 

FY 2018 

Annualized CR 

FY 2019 

Request 

11.1 Full-Time Permanent Positions 3,087,675 3,008,283 3,022,409 

11.3 Other than Full-Time Permanent Positions 30,293 30,585 30,732 

11.5 Other Personnel Compensation 109,767 112,910 110,611 

11.8 Special Personal Services Payments 20,604 22,591 22,700 

11.9 Personnel Compensation (Total) 3,248,339 3,174,369 3,186,452 

12.1 Personnel Benefits 1,167,137 1,137,487 1,142,824 

13.0 Benefits to Former Personnel 572 534 537 

Total Personnel and Compensation Benefits $4,416,048 $4,312,390 $4,329,813 

21.0 Travel 56,428 60,170 61,124 

22.0 Transportation of Things 7,838 8,314 8,445 

23.1 Rental Payments to GSA 4 9 9 

23.2 Rent Payments to Others 298 361 367 

23.3 Communications, Utilities, & Misc 2,523 2,294 2,330 

24.0 Printing & Reproduction 1,951 2,237 2,273 

25.1 Advisory & Assistance Services 59,335 113,903 115,838 

25.2 Other Services 31,556 39,437 39,047 

25.3 Purchase of Goods & Services from Govt. Accounts 24,780 33,007 33,531 

25.4 Operation & Maintenance of Facilities 13 13 13 

25.6 Medical Care 49 7 7 

25.7 Operation & Maintenance of Equipment 1,500 2,761 2,805 

26.0 Supplies and Materials 20,210 23,354 23,725 

31.0 Equipment 8,408 7,532 7,651 

32.0 Land and Structures 449 3 3 

42.0 Insurance Claims & Indemnities 1,205 1,204 1,223 

44.0 Refunds 6 

91.0 Unvouchered 7,399 

Total Non-Personnel $223,952 $294,606 $298,391 

New Appropriated Resources $4,640,000 $4,606,996 $4,628,204 

Budget Activities 

Investigations 595,206 576,802 578,949 

Exam & Collections 3,914,546 3,874,918 3,893,373 

Regulatory 130,248 155,276 155,882 

New Appropriated Resources $4,640,000 $4,606,996 $4,628,204 

FTE 36,550 34,662 34,662 

See footnotes in 1.1 – Appropriations Detail Table 
IRS-40 

2.3 – Appropriation Detail Table 

2C – Investigations ($578,949,000 in direct appropriations, and an estimated $32,769,000 

from reimbursable programs): This budget activity funds the Criminal Investigation (CI) 

programs that explore potential criminal and civil violations of tax laws; enforce criminal 

statutes relating to violations of tax laws and other financial crimes; and recommend 

prosecution as warranted. The program activities include: 

 General Management and Administration supports the headquarters management 

activities of strategic planning, communications, finance, and human resources for 

CI activities. 

 Identity Theft supports the Stolen Identity Refund Fraud (SIRF) inherent risks while 

focusing on high impact tax investigations, prosecutions to maximize deterrence, and 

stopping fraudulent refunds from being issued through CI's collaboration with internal 

and external business partners. 

 Criminal Investigations supports the enforcement of criminal statutes relating to 

violations of internal revenue laws and other financial crimes. CI investigates cases of 

suspected intent to defraud involving both legal and illegal sources of income and 

recommends prosecution as warranted. This includes the investigation and 

prosecution of tax and money-laundering violations associated with narcotics 

organizations. 

 Criminal Tax Legal Support provides legal advice and support. 

 International Investigations supports international investigations involving U.S. 

citizens residing abroad, non-resident aliens, expatriates (U.S. citizens living abroad 

who have renounced their citizenship), and investigations involving other international 

issues, including legal support (e.g., Foreign Tax Credit and Foreign Earned Income 

Exclusion, Corporations, Non-Profits, Pension Plans, etc.). 

 Cybersecurity supports CI’s cyber-efforts around inherent risks to IRS networks and 

systems while focusing enforcement and investigative actions on the criminals that 

Dollars in thousands

Enforcement

Appropriated Resources

FTE AM OUNT FTE AM OUNT FTE AM OUNT FTE AM OUNT FTE AM OUNT

N ew A ppro priated R eso urces:

Investigations 3,079 $595,206 2,913 576,802 2,913 578,949 2,147 0.37%

Exam and Collections 32,602 3,914,546 30,811 3,874,918 30,811 3,893,373 18,455 0.48%

Regulatory 869 130,248 938 155,276 938 155,882 606 0.39%

Subto tal N ew A ppro priated R eso urces 36,550 $ 4,640,000 34,662 $ 4,606,996 34,662 $ 4,628,204 $ 21,208 0.46%

Other Resources:

Reimbursables 59 34,228 53 33,566 55 33,932 2 366 3.77% 1.09%

Offsetting Collections - Non Reimbursables 16,407 16,407 17,227 820 5.00%

User Fees 90 9,537

Recovery from Prior Years 77 2,983 2,964 (19) -0.64%

Unobligated Balances from Prior Years 2 47,900 26,577 30,607 4,030 15.16%

Transfers In/Out 17

Resources from Other Accounts7 111

Subtotal Other Resources 152 $ 108,166 54 $ 79,533 56 $ 84,730 2 $ 5,197 3.70% 6.53%

T o tal B udgetary R eso urces 36,702 $ 4,748,166 34,716 $ 4,686,529 34,718 $ 4,712,934 2 $ 26,405 0.01% 0.56%

1See footnotes in 1.1 – Appropriations Detail Table

F Y 2018

Annualized CR

F Y 2018 to F Y 2019 

Request

F Y 2018 to F Y 2019 

Request

F Y 2019

Request

% C hange

F Y 2017

Enacted

Change
IRS-41 

pose those threats. This activity also supports security program management that 

protects the safeguarding of all data and systems within CI while adhering to all 

federal regulatory security compliance mandates and local security policies. 

Description of Performance 

CI serves the American public by investigating potential criminal violations of the Internal 

Revenue Code and related financial crimes in a manner that fosters confidence in the tax 

system and compliance with the law. The following measures are used to evaluate the 

success of achieving its mission. 

In FY 2017, CI completed 3,089 criminal investigations, missing the year-end target by 

0.4 percent. The number of completions decreased 17 percent from FY 2016. CI has 

experienced a steady decrease in the number of special agents available to work cases (due to 

attrition and limited hiring) as well as a continued focus on existing judicial process inventory 

and traditional tax case programs, which tend to have a higher cycle time. Consequently, 

cases of Legal, Illegal and Narcotics nature completed decreased (22.5 percent, 13.2 percent 

and 12.3 percent, respectively) compared to the same period in FY 2016. Due to staffing, the 

IRS lowered its FY 2018 target to 3,000 completed investigations and 2,900 for FY 2019. 

In FY 2017, the target of 2,100 was achieved but the number of convictions was 13.9 percent 

lower than FY 2016 (2,300 vs. 2,672) due to attrition and limited hiring. Quality 

investigations initiated and completed in previous years continue to be recommended for 

prosecution and processed by the Department of Justice (DOJ). CI management will continue 

to work with the DOJ Tax Division and U.S. Attorney Offices regarding prosecutorial 

priorities and the appropriate movement of pipeline investigations. The IRS expects to 

achieve its target of 1,900 convictions for FY 2018 and 1,800 for FY 2019. 

The FY 2017 conviction rate was slightly lower than FY 2016 (91.5 percent vs. 92.1 percent), 

and below the year-end target of 92 percent due to attrition in upstream investigative 

positions, case complexity, and bandwidth at partner agencies. Nevertheless, appropriate case 

selection and effective field performance continue to positively affect the number of cases 

resulting in convictions and likely prevented a greater decrease in the rate. Acquittals and 

dismissals decreased by 20 percent and 5.7 percent, respectively, compared to FY 2016. 

Since CI does not prosecute its own cases, it must depend on the ability of the DOJ to accept 

its cases for prosecution and to move such cases through the courts. CI management will 

continue its current efforts of appropriate and consistent contact with DOJ Tax Division and 

U.S. Attorney Offices regarding prosecutorial priorities and the appropriate movement of 

pipeline investigations to ensure a high rate of conviction and to meet the FY 2018 and 

FY 2019 targets of 92 percent. 
IRS-42 

FY 2019 Changes by Budget Activity 

Dollars in thousands 

Investigations FTE Amount 

FY 2018 Annualized CR Level 2,913 $576,802 

Changes to Base 

Maintaining Current Levels (MCLs) $3,494 

Pay Annualization 2,575 

Non-Pay 919 

Subtotal FY 2019 Changes to Base $3,494 

FY 2019 Current Services 2,913 $580,296 

Program Changes 

Program Decreases 

Actions to Achieve Workforce Management Goals (1,347) 

Subtotal FY 2019 Program Decreases ($1,347) 

Total FY 2019 Request 2,913 $578,949 

See footnotes in 1.1 – Appropriations Detail Table 

2.1.3 – Budget and Performance Report and Plan 

2D – Exam and Collections ($3,893,373,000 in direct appropriations and an estimated 

$986,000 from reimbursable programs): This budget activity funds programs that enforce the 

tax laws and increase compliance through examination and collection programs that ensure 

proper payment and tax reporting. This budget activity also includes campus support of the 

Questionable Refund program and appeals and litigation activities associated with exam and 

collection. The program activities include:

 Compliance Services Management supports management associated with exam and 

collection program activities. 

 Payment Compliance – Correspondence Collection supports IRS collection activities 

by initiating contact and collecting delinquent taxpayer liabilities through written 

notices and other means. 

 Automated Collections and Support initiates contact and collects delinquent taxpayer 

liabilities through the centralized Automated Collection System (ACS). 

Investigations FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019

Resource Level Actual Actual Actual Actual Enacted Annualized 

CR Request

Appropriated Resources1 $587,932 $601,740 $601,665 $591,449 $595,206 $576,802 $578,949

Reimbursable Resources2 28,582 27,133 29,957 29,053 33,618 31,209 32,769

User Fees2 2,979

Budget Activity Total $619,493 $628,873 $631,622 $620,502 $628,824 $608,011 $611,718

1

1The FY 2013 - FY 2017 appropriated resources line represents the approved operating plan including any inter-BAC transfers and inter-appropriation transfers.

2

The FY 2013 - FY 2017 columns represent realized resources for reimbursables and user fees.

Investigations FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2017 FY 2018 FY 2019

Measures Actual Actual Actual Actual Actual Target Target Target

Criminal Investigations Completed (Ot) (L) 5,557 4,606 4,486 3,721 3,089 3,100 3,000 2,900

Number of Convictions (Oe) (L) 3,311 3,110 2,879 2,672 2,300 2,100 1,900 1,800

Conviction Rate (Oe) (L) 93.1% 93.4% 93.2% 92.1% 91.5% 92.0% 92.0% 92.0%

Dollars in thousands

Key: Oe - Outcome Measure, E - Efficiency Measure, Ot - 
IRS-43 

 Payment Compliance – Field Collection conducts field investigations and collection 

efforts associated with delinquent taxpayer and business entity liabilities, including 

direct taxpayer contact and outreach programs to protect the interest of the Federal 

Government in delinquent tax liability situations. 

 Tax Reporting Compliance – Document Matching supports the Automated 

Underreporter (AUR), Combined Annual Wage Reporting (CAWR), Federal 

Unemployment Tax Act (FUTA), and other Document Matching Programs. 

 Tax Reporting Compliance – Electronic/Correspondence Exam initiates written 

correspondence with taxpayers related to tax issues arising from claims on their tax 

returns. 

 Tax Reporting Compliance – Field Exam compares taxpayer income levels and 

corresponding tax liabilities to ensure the accuracy of taxpayer returns. 

 Fraud/Bank Secrecy Act enforces the anti-money laundering provisions of the Bank 

Secrecy Act of 1970 (BSA) and the USA Patriot Act of 2001. It examines non-bank 

financial institutions for compliance with these laws, receives and processes more than 

15 million financial reports annually, and manages a centralized database of that 

information for the Financial Crimes Enforcement Network. The Fraud program 

follows the money trail to support the criminal investigation of tax evasion operations. 

Fraud technical advisors and revenue agents provide investigative leads and referrals 

to federal, state, and local law enforcement agencies. 

 Appeals provides an administrative review process that provides a channel for 

impartial case settlement before a case is docketed in a court of law. 

 Litigation provides legal support for the IRS in litigation of cases, including 

interpretation of the tax law. 

 Specialty Programs – Exams examines federal tax returns of businesses and 

individuals responsible for the filing and payment of employment, excise, estate, and 

gift taxes. 

 International Collection supports international field collection efforts associated with 

delinquent taxpayer and business entity liabilities from U.S. citizens residing abroad, 

non-resident aliens, expatriates (U.S. citizens living abroad who have renounced their 

citizenship), and those involving other international issues (e.g., Foreign Tax Credit 

and Foreign Earned Income Exclusion). 

 International Exams supports the international exam program involving U.S. citizens 

residing abroad, non-resident aliens, expatriates, and other examinations involving 

other international issues including legal support (e.g., Foreign Tax Credit and Foreign 

Earned Income Exclusion, Corporations, Non-Profits, Pension Plans, etc.). 

 Unit General Management and Administration provides staffing, training, and direct 

support for headquarters management activities of strategic planning, communication 

and liaison, finance, human resources, equity, diversity and inclusion, business system 

planning, and embedded training. 

 EITC Management and Administration supports headquarters management associated 

with administering the Earned Income Tax Credit (EITC) program. 
IRS-44 

 Integrity & Verification Operations supports civil fraud detection and prevention 

efforts in a pre-refund environment including monitoring performance and developing 

policy, procedures, and guidance for processing civil revenue protection programs. 

 ID Theft Victim Assistance has end-to-end responsibility and accountability for 

identity theft victim assistance policy and operations, which will include paper 

inventories from tax-related ID theft, the Identity Theft Protection Specialized Unit 

(IPSU), and Return Preparer Misconduct. 

 Whistleblower Office provides staffing, training, and direct support to process, assess, 

and analyze tips from individuals who identify potential tax problems. 

 Communications and Liaison coordinates local government and liaison relationships; 

manages congressional, state, and national stakeholder relationships and issues; 

coordinates crosscutting issues, including audit management and legislative 

implementation; manages national media contacts and local media relationships; and 

ensures compliance with disclosure and privacy laws. 

Description of Performance – Exam 

The Examination program provides taxpayers service by helping them understand and meet 

their tax responsibilities and by applying the tax law with integrity and fairness. The 

performance goals the IRS uses to gauge the Examination program’s performance are: 

Individual Exam Coverage: target of 0.6 percent was met in FY 2017. About 120,000 fewer 

individual audits were completed, an 11.6 percent decrease compared to FY 2016. 

Examination sets its individual exam coverage rate by ensuring resources are appropriately 

planned for, proper inventory levels are maintained, and efficiencies are monitored to achieve 

planned targets. The IRS will maintain a target of 0.6 percent for FY 2018 and FY 2019. 

Field Exam National Quality Review Score: 85 percent in FY 2017, below the target of 

86.7 percent. The loss of experienced employees, cases transferred from examiner to 

examiner when employees leave their position, and the loss of permanent front-line managers 

are all factors that create quality challenges. To facilitate improvement in FY 2018, Exam is 

forming a joint quality team to analyze quality data trends and the influence of organization 

changes on quality scores. FY 2018 commitments proposed for Territory and Group 

Managers include refresher training on both Exam Technical Time Reports and Exam Process 

Reviews, as well as focused exam quality narratives on the lowest scoring attributes. The 

Small Business Self Employed (SB/SE) division also plans to implement an area-wide risk 

assessment to determine appropriate actions (i.e., close/reassign) upon case reassignment. It 

is expected that developing and communicating guidance at the group level will improve 

quality and customer satisfaction. Based on the most recent data and staffing, the IRS will set 

the FY 2018 target at 84.4 percent and the FY 2019 target at 86.7 percent. 

Office Exam Quality: 87.9 percent in FY 2017, above the target of 86.7. Improvement efforts 

included delivery of educational workshops, completion of case closing check sheets and the 

use of job aids. The IRS will maintain the FY 2018 target of 86.7 percent and will increase 

the FY 2019 target to 88.3 percent. 
IRS-45 

The Examination Quality – Large Business: 78 percent in FY 2017, 12 percentage points 

below the target of 90 percent. The 78 percent was a result of low scores in all three audit 

standards. The Large Business & International (LB&I) Quality Review and Analysis (QRA) 

division established a core team to develop and implement an action plan to assist the field 

examination operations in preparing quality case work in accordance with the Internal 

Revenue Manual. Many of the actions in the plan have already been implemented, including 

briefing all directors of Field Operations (DFOs) on scoring methodology and areas to focus 

on for improvement; preparing a quality kick-off memo from the LB&I Commissioner to 

emphasize the importance of quality review; drafting performance commitments for the DFO, 

territory manager, and frontline managers that incorporates case quality improvements; and 

providing briefings and educational presentations at field level meetings. Several other 

activities are underway, including a collaboration with statisticians from Research, Applied 

Analytics and Statistics to review and update the sampling methodology to improve accuracy. 

The FY 2018 and FY 2019 target is 90 percent. 

The Examination Coverage – Business (Assets > $10 million) measure is calculated by taking 

the total number of LB&I returns with assets of more than $10 million (including all 

partnerships) examined and closed by LB&I during the current fiscal year, divided by total 

filings for the preceding calendar year. In FY 2017, Business Examination Coverage was 

2.5 percent, below the target of 2.7 percent. Two factors combined to cause the coverage rate 

shortfall: 1) the actual number of return filings used in the denominator of the coverage rate 

calculation increased by 6 percent from original projection, resulting in a decrease of 

0.1 percent in the coverage rate; 2) the number of closed large business returns was 

1.5 percent less than had been projected and accounts for the remaining decrease of 

0.1 percent in the coverage rate. A decline in closures of the largest corporations was the 

primary cause of this decrease. The IRS will lower the FY 2018 target to 2.4 percent and FY 

2019 target to 1.8 percent, based on a 3 percent increase in projected return filings and a 

reduction in planned closures to account for taxpayers and agents affected by the hurricane 

disaster area declarations. Due to the recent hurricanes, tax returns for impacted taxpayers 

were placed in a freeze status prohibiting examination activity on these identified taxpayers 

until after January 31, 2018. To account for this five month suspension, 1.8 percent of the 

returns projected to close in FY 2018 will be delayed until FY 2019. At the same time, 

because employees that work in the declared disaster areas from the hurricanes were not 

available to start examinations, fewer returns were started that will be available to close for 

FY 2018. An additional decrease in the FY 2019 target is driven by a reduction in projected 

staffing from FY 2018 to FY 2019 of 6 percent. 

Individual Exam Efficiency (the number of closures divided by total Exam FTE) was 121, 

exceeding the FY 2017 target of 118. Based on prior year hiring and the most current FTE 

data available assuming no attrition or overtime, the IRS will raise the Individual Exam 

Efficiency target to 134 for FY 2018 and 129 for FY 2019. 

Automated Underreporter (AUR) Efficiency was 2,188 in FY 2017, exceeding the year-end 

target of 2,133. Although total AUR closures and FTEs decreased 5.2 percent and 

4.9 percent, respectively, compared to last year, efficiency was within 1 percent of FY 2016 

due to more staff than projected working inventory. The FY 2018 and FY 2019 level targets 

will remain at 2,133.
IRS-46 

AUR Coverage was 2.2 percent in FY 2017 and above the target of 2 percent due to more 

staff than projected working inventory. The IRS will lower the target to 1.9 percent for FY 

2018 and FY 2019 based on less staffing available to work cases. 

Description of Performance ‒ Collection 

The Collection program collects delinquent taxes and secures delinquent tax returns through 

the fair and equitable application of tax laws and provides education to customers to promote 

future compliance, thereby protecting and instilling public confidence in the American tax 

system. The performance goals the IRS uses to gauge collection program performance are: 

Collection Coverage was 42.2 percent in FY 2017, exceeding the target of 37.5 percent. Net 

dispositions decreased 5.5 percent compared to FY 2016 (20.6 million vs. 21.8 million). 

Beginning Inventory, and Returned to Inventory cases increased 3.6 percent and 19.7 percent, 

respectively, while New Issuance Receipts and Reissuances decreased 25.3 percent and 

69.1 percent, respectively. Contributing to the increase in Collection Coverage is an overall 

reduction in Collection Inventory of about 4.5 percent. A reduction in overall collection 

inventory further improves the Coverage rate. The IRS will set a target of 38.6 percent for 

FY 2018 and 36 percent in FY 2019 based on the most recent disposition and inventory 

projections. 

Collection Efficiency: FY 2017 was 2,135, exceeding the target of 2,117. Since FY 2013, due 

to staffing and resource constraints, FTEs decreased 16 percent while collection case closures 

only declined 13 percent. The Collection organization will continue to identify opportunities 

to increase productivity by streamlining processes and case selection in FY 2018. The 

planned reduction in overall inventory dispositions in FY 2018 is expected to affect overall 

Collection Efficiency. The IRS will set a target of 2,101 for FY 2018 and 2,029 for FY 2019. 

Field Collection Quality: FY 2017 was 76.7 percent, below the target of 79.7 percent. The 

shortfall in Field Collection Quality is primarily due to a decline in the following attributes: 

203 (Requested/Secured Financial Information), 432 (Verify/Analyze Ability to Pay), 

437 (Compliance), and 618 (Action Dates, Expectations, and Consequences). To address the 

shortfall and improve performance, Field Collection held consistency and workgroup review 

meetings with staff to identify quality review trends and review trends and process 

improvements. Focused communication and training materials were developed to drive 

improvements in casework. Field Collection also worked in FY 2017 to clarify 

documentation and Internal Review Manual sections that may have created confusion and 

negatively affected quality results, many of which have been implemented fully with 

additional changes coming in early FY 2018. To improve quality in the basic attributes, Field 

Collection collaborated with National Quality and Collection Headquarters to develop two 

short Podcasts to train Revenue Officers and managers on basic errors noted by managers and 

reviewers. Field Collection Quality anticipates launching the Podcasts starting in late October 

2018. The positive effect of these activities, along with advanced technical training scheduled 

for FY 2018 should result in improved quality scores.  With a continued emphasis on 

improving timeliness and the quality of work products, the IRS will set a target of 78 percent 

in FY 2018 and FY 2019. 
IRS-47 

Automatic Collection System (ACS) Accuracy: FY 2017 was 94.7 percent, slightly below the 

target of 95 percent. Results for this measure had been above 94 percent consistently since 

2008. Periodic performance reviews were conducted on the campus program and 

communicated to the sites. The top drivers of accuracy errors were analyzed and other quality 

issues were discussed with the Quality staff at the sites each month and this practice will 

continue. Additionally, training opportunities are recommended based on high rates of errors 

received and served as the basis for topics for the Continuing Professional Education 

seminars. The IRS will set a target of 95 percent in FY 2018 and FY 2019. 

FY 2019 Changes by Budget Activity 

Dollars in thousands 

Exam and Collections FTE Amount 

FY 2018 Annualized CR Level 30,811 $3,874,918 

Changes to Base 

Maintaining Current Levels (MCLs) $22,185 

Pay Annualization 17,782 

Non-Pay 4,403 

Subtotal FY 2019 Changes to Base $22,185 

FY 2019 Current Services 30,811 $3,897,103 

Program Changes 

Program Decreases 

Actions to Achieve Workforce Management Goals (3,730) 

Subtotal FY 2019 Program Decreases ($3,730) 

Total FY 2019 Request 30,811 $3,893,373 

See footnotes in 1.1 – Appropriations Detail Table 
IRS-48 

2.1.4 – Budget and Performance Report and Plan

2E – Regulatory ($155,882,000 in direct appropriations and an estimated $177,000 from 

reimbursable programs): This budget activity funds the development of published IRS 

guidance materials; interpretation of tax laws; internal advice to IRS on general non-tax legal 

issues; enforcement of regulatory rules, laws, and approved business practices; and support 

for taxpayers in the areas of pre-filing agreements, determination letters, and advance pricing 

agreements. The activities include: 

 Tax Law Interpretation and Published Guidance interprets tax law through published 

guidance, technical advice, and other technical legal services. 

 General Legal Services provides advice to the IRS on non-tax legal issues, including 

procurement, personnel, labor relations, equal employment opportunity, fiscal law, tort 

claims and damages, ethics, and conflict of interest. 

 Rulings and Agreements applies the tax law to specific taxpayers in the form of 

pre-filing agreements, determination letters, advance pricing agreements, and other 

pre-filing determinations and advice. 

 International Regulatory Legal Support supports Counsel’s work in tax law 

interpretation and rulings and agreements related to international issues. 

Exam and Collections FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019

Resource Level Actual Actual Actual Actual Enacted Annualized CR Request

Appropriated Resources1 $4,188,328 $4,154,342 $4,018,292 $3,945,578 $3,914,546 $3,874,918 $3,893,373

Reimbursable Resources2 804 640 456 450 2,189 986

User Fees2 36

Budget Activity Total $4,189,132 $4,154,342 $4,018,932 $3,946,070 $3,914,996 $3,877,107 $3,894,359

1

The FY 2013 - FY 2017 appropriated resources line represents the approved operating plan including any inter-BAC transfers and inter-appropriation transfers.

2

The FY 2013 - FY 2017 columns represent realized resources for reimbursables and user fees.

Exam and Collections FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2017 FY 2018 FY 2019

Measures Actual Actual Actual Actual Actual Target Target Target

Examination Coverage - Individual (Oe) (L) 1.0% 0.9% 0.8% 0.7% 0.6% 0.6% 0.6% 0.6%

Field Exam National Quality Review Score (Oe) (L) 89.2% 88.4% 86.7% 86.8% 85.0% 86.7% 84.4% 86.7%

Office Exam National Quality Review Score (Oe) (L) 90.3% 90.6% 88.3% 88.4% 87.9% 86.7% 86.7% 88.3%

Examination Quality - Large Business1 (Oe) (L)

92.0% 83.0% 86.0% 83.0% 78.0% 90.0% 90.0% 90.0%

(New in FY 2013)

Examination Coverage - Business (Assets > $10 million) (Oe) (L) 5.6% 4.3% 3.9% 3.0% 2.5% 2.7% 2.4% 1.8%

Automated Underreporter (AUR) Efficiency (E) (L) 2,025 1,935 2,209 2,196 2,188 2,133 2,133 2,133

Automated Underreporter (AUR) Coverage (E) (L) 2.8% 2.6% 2.3% 2.3% 2.2% 2.0% 1.9% 1.9%

Examination Efficiency - Individual (E) (L) 142 138 148 143 121 118 134 129

Collection Coverage - Units (Ot) (L) 47.0% 45.9% 46.3% 43.4% 42.2% 37.5% 38.6% 36.0%

Collection Efficiency - Units (E) (L) 2,057 2,051 2,448 2,266 2,135 2,117 2,101 2,029

Field Collection National Quality Review Score (Ot) (L) 81.4% 81.6% 79.2% 79.2% 76.7% 79.7% 78.0% 78.0%

Automated Collection System (ACS) Accuracy (Oe) 94.4% 95.2% 95.3% 95.4% 94.7% 95.0% 95.0% 95.0%

Dollars in thousands

Key: Oe - Outcome Measure, E - Efficiency Measure, L - Long Term Goal, Ot - Output/Workload Measure

1

As a result of program changes that occurred in the Large Business and International (LB&I) organization, starting in FY 2013, a new Examination Quality - Large Business measure will replace the 

two previous LB&I quality measures - Examination Quality - Industry and Coordinated Industry.
IRS-49 

 Return Preparer Strategy provides staffing, training, and direct support associated 

with the Return Preparer Strategy. 

 Office of Professional Responsibility identifies, communicates, and enforces Treasury 

Circular 230 standards of competence, integrity, and conduct of those who represent 

taxpayers before the IRS, including attorneys, Certified Public Accountants (CPAs), 

enrolled agents, enrolled actuaries and appraisers, and other professionals.

Description of Performance 

Tax Exempt and Government Entities (TEGE) Determination Closures includes both 

applications for tax-exempt status for employee retirement plans (EP) and applications from 

various charitable entities seeking tax-exempt status (EO). The IRS reviews applications to 

determine eligibility and closes them upon approval or disapproval. 

Total determination closures in FY 2017 completed was 102,749, exceeding the target of 

95,791 by 7.3 percent. Exempt Organization case closures exceeded the target primarily 

because of a higher than anticipated number of Form 1023-EZ, Streamlined Application for 

Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code, receipts. 

Because the Form 1023-EZ requires less time to close, more cases were completed during the 

year. Employee Retirement Plan case closures exceeded plan by 29 percent because of a shift 

in focus to closing the simpler Form 5307, Application for Determination for Adopters of 

Modified Volume Submitter Plans, in lieu of Form 5300, Application for Determination for 

Employee Benefit Plan. 

TEGE anticipates a decrease in Exempt Organization case closures starting in FY 2018 and 

continuing into FY 2019. In addition to an expected increase in receipts, planned changes in 

the Form 1023-EZ will require additional hours to be applied to each case. TEGE expects to 

hire or detail in additional staff to help with reviewing the Form 1023-EZ to maintain closures 

of EO determination applications at historical levels. 

Additionally, TEGE anticipates experiencing a decrease in closures from Employee Plans in 

FY 2019 due to planned program changes that will result in fewer receipts of applications. 

Specifically, TEGE has stopped accepting applications to amend employee plans, which 

historically represented about 75 percent of the applications received in the program. TEGE 

expects to receive about 1,800 initial and termination applications per year, which previously 

accounted for about 25 percent of total receipts. Therefore, IRS lowered the FY 2018 

Determination Closures target to 94,103 and the FY 2019 target to 88,886. 

 
IRS-50 

FY 2019 Changes by Budget Activity 

Dollars in thousands 

Regulatory FTE Amount 

FY 2018 Annualized CR Level 938 $155,276 

Changes to Base 

Maintaining Current Levels (MCLs) $919 

Pay Annualization 678 

Non-Pay 241 

Subtotal FY 2019 Changes to Base $919 

FY 2019 Current Services 938 $156,195 

Program Changes 

Program Decreases 

Actions to Achieve Workforce Management Goals (313) 

Subtotal FY 2019 Program Decreases ($313) 

Total FY 2019 Request 938 $155,882 

See footnotes in 1.1 – Appropriations Detail Table 

2.1.5 – Budget and Performance Report and Plan 

Regulatory FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019

Resource Level Actual Actual Actual Actual Enacted Annualized CR Request

Appropriated Resources1 $147,411 $158,415 $147,605 $137,245 $130,248 $155,276 $155,882

Reimbursable Resources2 631 792 363 202 160 168 177

User Fees2 14,521 13,241 18,485 9,233 9,537

Budget Activity Total $162,563 $172,448 $166,453 $146,680 $139,945 $155,444 $156,059

1

The FY 2013 - FY 2017 appropriated resources line represents the approved operating plan including any inter-BAC transfers and inter-appropriation transfers.

2

The FY 2013 - FY 2017 columns represent realized resources for reimbursables and user fees.

Regulatory FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2017 FY 2018 FY 2019

Measure Actual Actual Actual Actual Actual Target Target Target

TE/GE Determination Case Closures (Ot) 65,877 136,746 111,940 99,973 102,749 95,791 94,103 88,886

Key: Ot - Output/Workload Measure

Dollars in thousands
IRS-51 

Operations Support 

Appropriation Description 

The Operations Support appropriation provides funding for overall planning, direction, and 

support for the IRS, including shared service support related to facilities services, rent 

payments, printing, postage, and security. This appropriation funds headquarters policy and 

management activities such as corporate support for strategic planning; communications and 

liaison; finance; human resources; equity, diversity, and inclusion; research and statistics of 

income; and necessary expenses for information systems and telecommunication support, 

including development, security, and maintenance of the IRS’s information systems. 

The Operations Support budget request for FY 2019 is $4,155,796,000 in direct 

appropriations and 10,959 FTE, excluding the proposed program integrity cap adjustment. 

This is an increase of $241,808,000, or 6.18 percent, and 146 or 1.35 percent more FTE than 

the FY 2018 Annualized Continuing Resolution of $3,913,988,000 and 10,813 FTE. 
IRS-52 

2.1 – Budget Adjustments Table 

Dollars in thousands 

Operations Support 

Summary of Proposed FY 2019 Request FTE Amount 

FY 2018 Annualized CR Level 10,813 $3,913,988 

Changes to Base 

Maintaining Current Levels (MCLs) $53,808 

Pay Annualization 7,823 

Non-Pay Inflation Adjustment 45,985 

Efficiencies/Savings (6,103) 

Increase e-File Savings (102) 

Space Optimization (6,001) 

Reinvestment $12,798 

Support Aging IT Infrastructure 12,798 

Subtotal FY 2019 Changes to Base $60,503 

FY 2019 Current Services 10,813 $3,974,491 

Program Changes 

Program Increases 

Stabilize, Secure and Transform IT Operations 146 $181,305 

Strengthen Cyber Security 10 40,000 

Identity Assurance - e-Authentication Enhancements and Authorization Integration 21 24,300 

Aging Technology Infrastructure 39,000 

Migration to Cloud Services 20,000 

Stabilize IT Operations 115 58,005 

Subtotal FY 2019 Program Increases 146 $181,305 

Total FY 2019 Budget Request 10,959 $4,155,796 

See footnotes in 1.1 – Appropriations Detail Table 
IRS-53 

2.2 – Operating Levels Table 

Dollars in thousands 

Operations Support 

Object Classification 

FY 2017 

Enacted 

FY 2018 

Annualized CR 

FY 2019 

Request 

11.1 Full-Time Permanent Positions 1,090,951 1,152,588 1,173,685 

11.3 Other than Full-Time Permanent Positions 6,065 7,537 7,574 

11.5 Other Personnel Compensation 20,600 22,924 23,375 

11.8 Special Personal Services Payments 224 230 231 

11.9 Personnel Compensation (Total) 1,117,840 1,183,279 1,204,865 

12.1 Personnel Benefits 364,187 383,116 389,890 

13.0 Benefits to Former Personnel 59 56 56 

Total Personnel and Compensation Benefits $1,482,086 $1,566,451 $1,594,811 

21.0 Travel 11,467 16,915 17,487 

22.0 Transportation of Things 10,150 14,969 15,288 

23.1 Rental Payments to GSA 592,632 593,175 598,993 

23.2 Rent Payments to Others 11,905 12,367 12,606 

23.3 Communications, Utilities, & Misc 298,453 337,240 344,323 

24.0 Printing & Reproduction 17,676 18,535 18,924 

25.1 Advisory & Assistance Services 703,402 572,649 689,225 

25.2 Other Services 49,543 42,637 43,888 

25.3 Purchase of Goods & Services from Govt. Accounts 75,991 76,552 78,799 

25.4 Operation & Maintenance of Facilities 195,837 180,539 184,447 

25.5 Research & Development Contracts 21 

25.6 Medical Care 14,603 13,865 14,192 

25.7 Operation & Maintenance of Equipment 36,040 73,578 76,232 

26.0 Supplies and Materials 8,212 9,273 9,536 

31.0 Equipment 323,412 372,479 443,683 

32.0 Land and Structures 16,906 12,094 12,679 

42.0 Insurance Claims & Indemnities 910 670 683 

Total Non-Personnel $2,367,160 $2,347,537 $2,560,985 

New Appropriated Resources $3,849,246 $3,913,988 $4,155,796 

Budget Activities 

Infrastructure 869,732 847,444 860,058 

Shared Services & Support 991,504 994,559 1,005,911 

Information Services 1,988,010 2,071,985 2,289,827 

New Appropriated Resources $3,849,246 $3,913,988 $4,155,796 

FTE 10,835 10,813 10,959 

See footnotes in 1.1 – Appropriations Detail Table 
IRS-54 

2.3 – Appropriation Detail Table 

2F – Infrastructure ($860,058,000 in direct appropriations and an estimated $711,000 from 

reimbursable programs): This budget activity funds administrative services related to space 

and housing, rent and space alterations, building services, maintenance, guard services, and 

non-IT equipment. The program activities include:

 Building Delegation oversees and manages the IRS GSA-delegated buildings, 

including cleaning, maintenance, utilities, protection, administrative, and recurring and 

one-time repair costs. 

 Rent provides resources for all IRS rent needs. The IRS will spend more an estimated 

$611 million on rental payments in FY 2019 to keep more than 300 Taxpayer 

Assistance Centers (TACs) open to the public and provide office space for more than 

70,000 employees across the country. 

 Space and Housing/Non-IT Equipment provides management of all IRS building 

services, maintenance, space alterations, guard services, custodial overtime, utility 

service needs, and non-IT equipment. 

 Security covers building security costs related to contract guard services. 

 

Dollars in thousands

Operations Support

Appropriated Resources

FTE AM OUNT FTE AM OUNT FTE AM OUNT FTE AM OUNT FTE AM OUNT

N ew A ppro priated R eso urces:

Infrastructure $869,732 847,444 860,058 12,614 1.49%

Shared Services and Support 4,777 991,504 4,588 994,559 4,588 1,005,911 11,352 1.14%

Information Services 6,058 1,988,010 6,225 2,071,985 6,371 2,289,827 146 217,842 2.35% 10.51%

Subto tal N ew A ppro priated R eso urces 10,835 $ 3,849,246 10,813 $ 3,913,988 10,959 $ 4,155,796 146 $ 241,808 1.35% 6.18%

Other Resources:

Reimbursables 86 55,135 85 65,632 74 42,847 (11) (22,785) -12.94% -34.72%

Offsetting Collections - Non Reimbursables

User Fees 202,584 397,000 397,000

Recovery from Prior Years 2,419 11,514 11,513 (1) -0.01%

Unobligated Balances from Prior Years 34 116,150 88,567 80,696 (7,871) -8.89%

Subtotal Other Resources 120 $ 376,288 85 $ 562,713 74 $ 532,056 (11) ($ 30,657) -12.94% -5.45%

T o tal B udgetary R eso urces 10,955 $ 4,225,534 10,898 $ 4,476,701 11,033 $ 4,687,852 135 $ 211,151 1.24% 4.72%

1See footnotes in 1.1 – Appropriations Detail Table

F Y 2018 to F Y 2019 

Request

F Y 2019

Request 6,7

F Y 2018 to F Y 2019 

Request

C hange % C hange

F Y 2018

Annualized CR

F Y 2017

Enacted
IRS-55 

Description of Performance 

The IRS continued efforts to realize operational efficiencies and manage costs effectively by 

improving enterprise-wide resources and streamlining processes. 

Other than payroll, rent is the IRS's largest operating expense. The IRS has identified 

opportunities to reduce the cost of rent and improve its use of office space. In FY 2017, the 

IRS completed 37 projects to release more than 411,000 square feet of rented space for an 

annual rent reduction of over $10 million. As part of an effort to contain costs and improve 

space use, the IRS continued using the Strategic Facility Plan process, focused on closing or 

consolidating workspace at the time of lease expiration. Project identification of more space 

efficiency projects will continue in FY 2019 and into the future. 

Starting in FY 2017, the IRS introduced a Rentable Square Feet per Person (RSFP) indicator 

into the budget submission. For FY 2017, the RSFP was 297. Efforts leveraging telework 

and field activities to reduce demand for full-time office space has provided additional 

opportunities to reduce the IRS’s space footprint. The IRS also intends to place new hires in 

existing space and renew leases at existing sites rather than move to new locations when cost 

effective and when permitted by procurement regulations. These actions will help limit the 

projected rent costs in the future. 

FY 2019 Changes by Budget Activity 

Dollars in thousands 

Infrastructure FTE Amount 

FY 2018 Annualized CR Level $847,444 

Changes to Base 

Maintaining Current Levels (MCLs) $16,425 

Pay Raise 

Pay Annualization 

Non-Pay 16,425 

Efficiency/Savings ($6,001) 

Increase e-File Savings 

Space Optimization (6,001) 

Reinvestment 

Support Aging IT Infrastructure 

Subtotal FY 2019 Changes to Base $10,424 

FY 2019 Current Services $857,868 

Program Changes 

Program Increases 

Stabilize, Secure and Transform IT Operations $2,190 

Cyber Security 150 

Identity Assurance - e-Authentication Enhancements and Authorization Integration 315 

Stabilize IT Operations 1,725 

Subtotal FY 2019 Program Increases $2,190 

Total FY 2019 Request $860,058 

See footnotes in 1.1 – Appropriations Detail Table 
IRS-56 

2.1.6 – Budget and Performance Report and Plan 

 

2G – Shared Services and Support ($1,005,911,000 in direct appropriations, an estimated 

$21,399,000 from reimbursable programs, and an estimated $1,000,000 from user fees): This 

budget activity funds policy management, IRS-wide support for research, strategic planning, 

communications and liaison, protection of sensitive information and the privacy of taxpayers 

and employees, finance, human resources, and equity, diversity, and inclusion programs. It 

also funds printing and postage, business systems planning, physical security, legal services, 

and procurement. The program activities include: 

 National Headquarters Management and Administration directs the management 

activities of strategic planning, communications and liaison, finance, human resources, 

equity, diversity and inclusion programs, business systems planning, embedded 

training, and the Treasury Franchise Fund. It sets policies and goals, provides 

leadership and direction for the IRS, and builds partner relationships with key 

stakeholders (Congress, GAO, and OMB). It provides policy guidance for conducting 

planning and budgeting strategies, conducting analyses of programs and investments 

to support strategic decision-making, and developing and managing human resources. 

It also includes official reception and representation expenses. 

 Facilities Management & Security Services provides facilities and security services to 

deliver a safe, secure and optimal work environment to IRS customers and employees. 

 Procurement supports the procurement function of the IRS and Treasury’s 

Departmental Offices. 

 Equity, Diversity and Inclusion Field Services provides staffing, training, and direct 

support to plan and manage the IRS’s Equity, Diversity and Inclusion program. 

 Communications and Liaison handles congressional, national, and local stakeholder 

relationships and issues; coordinates and addresses crosscutting issues, including 

legislative implementation; works with representatives of the national and local tax 

community; communicates with individual and business taxpayers by developing 

information on IRS.gov and providing other taxpayer-facing content; handles national 

and local media contacts and relationships; and employee communications. 

 Employee Support Services plans and manages financial services, including relocation, 

travel, purchase cards, corporate express, and employee clearances. 

Infrastructure FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019

Resource Level Actual Actual Actual Actual Enacted Annualized 

CR Request

Appropriated Resources1 $874,627 $845,558 $833,846 $838,048 $869,732 $847,444 $860,058

Reimbursable Resources2 701 16,694 928 626 634 677 711

User Fees2 5,414 17,137

Budget Activity Total $880,742 $879,389 $834,774 $838,674 $870,366 $848,121 $860,769

1

The FY 2013 - FY 2017 appropriated resources line represents the approved operating plan including any inter-BAC transfers and inter-appropriation transfers.

2

The FY 2013 - FY 2017 columns represent realized resources for reimbursables and user fees.

Infrastructure FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2017 FY 2018 FY 2019

Measure Actual Actual Actual Actual Actual Target Target Target

Rentable Square Feet per Person (new for FY 2017) 297 Indicator Indicator Indicator

Dollars in thousands

Key: Ot - Output/Workload Measure
IRS-57 

 Treasury Complaint Centers plan and manage the Treasury Complaint Centers. 

 Shared Support not provided by Agency-Wide Shared Services provides resources for 

shared cross-functional support, such as postage meters, shredders, courier services, 

and post office boxes. 

 Printing and Postage – Media and Publications provides operating divisions with 

printing and postage, including shipping of taxpayer and internal use materials. 

 Statistics of Income provides resources for researching annual income, financial, and 

tax data from tax returns filed by individuals, corporations, and tax-exempt 

organizations. 

 Research provides resources for market-based research to identify compliance issues, 

for conducting tests of treatments to address noncompliance, and for the 

implementation of successful strategies to address taxpayer noncompliance.

 Wage and Investment (W&I) Business Modernization Support provides staffing, 

training, and direct support for W&I’s enterprise-wide business modernization efforts, 

including CADE 2, and Account Management Services (AMS) technology solutions, 

and re-engineered business processes. 

 Shared Services provide support services for all IRS employees, including Treasury 

Franchise Fund, Indemnity payments, Mailrooms, Logistics, Shredding and 

Uninterrupted Power Systems. 

Description of Performance 

Human Capital 

The IRS workforce is our most important resource. By providing improved training and tools 

to all employees and developing future leaders, the IRS helps its workforce better serve 

taxpayer needs and guide the next generation of IRS employees. In FY 2017, the IRS: 

 Worked with all Treasury bureaus to procure a Treasury-wide Integrated Talent 

Management (ITM) system. This single human resource information technology 

system will support the processes designed to attract, manage, develop, motivate and 

retain talent. The IRS will be purchasing the Learning Management, Performance 

Management, Workforce Planning/Analytics and Succession Planning modules and 

retiring legacy systems. The ITM system will provide economies of scale to reduce 

costs, leverage evolving technology to make efforts faster/easier and provide a better 

picture of talent pipelines to improve decision making. 

 Improved workplace morale, empowerment, and satisfaction based on the FY 2017 

Federal Employee Viewpoint Survey (FEVS) results. Results show the IRS is above 

the 65 percent Office of Personnel Management target for the Engagement Index, and 

the scores for 68 out of 71 FEVS questions improved. The IRS engagement focus 

encompasses all employees (managers, executives and frontline employees). In 

addition, it provides guidance for all operating and functional units to model 
IRS-58 

engagement efforts. The Engagement and Retention office assisted the business units 

with planning and implementing more than 200 engagement actions in FY 2017. 

Security and Partnerships 

The IRS worked on several initiatives related to the Security Summit, a collaborative effort 

between the IRS, state tax administrators, and private-sector tax partners. In FY 2017, the 

IRS: 

 Engaged with tax software industry members and received data elements from both 

individual and business tax returns to improve taxpayer authentication and identify 

possible identity theft scams as part of the Security Summit effort; 

 Collaborated with the Security Summit team to develop a new process that would 

allow the IRS to post alerts into the Information Sharing & Analysis Center (ISAC) 

functionality; and 

 Collaborated with the Social Security Administration and the Department of the 

Treasury to coordinate a data sharing method and subsequently received 10.4 million 

prisoner records. After excluding incomplete and duplicate records, the IRS produced 

two million usable records to include into the IRS’s annual prisoner database. 

Research

During FY 2017, the IRS’s Office of Research, Applied Analytics, & Statistics (RAAS) 

developed the foundational framework for the first integrated enterprise research plan, 

launched a customer-driven project intake process, managed the National Research Program 

and secured approval for long-term sustained support in developing a hiring plan to build out 

IRS’s analytic footprint. 

 Secured input and buy-in from members of the Research Policy and Planning 

Committee and the Research Directors Coordinating Council on a set of eight core 

research priorities that will serve as the framework for the first IRS Enterprise 

Research Plan. Working with the embedded business unit research organizations, 

RAAS led an effort to align all of the approximately 500 active research projects to 

one of the following eight research priorities: Customer Service Channel 

Optimization, Impact of Legislative Mandates, Internal Process Operations 

Optimization, Noncompliance Management, Revenue Protection, Service-wide 

Treatment Optimization, Strategic Thinking and Planning, and Taxpayer and Tax 

Administration Research. These priorities support the goals and objectives reflected 

in the IRS 2018 – 2022 Strategic Plan under development. 

 Launched a new customer-focused, single-point-of-entry project intake process, 

received, and handled in a timely fashion more than forty new requests. In addition to 

regular executive staff meetings, RAAS held bi-weekly portfolio meetings to discuss 

the new project requests and held strategic conversations on the existing research 

portfolio of about 250 projects. 

 Analyzed reporting compliance data through the National Research Program (NRP) 

for various taxpayer populations, including Individual Income Tax, Corporate Income 
IRS-59 

Tax, Employment Taxes, and Fuel Excise Taxes. For FY 2017, NRP continued the 

individual income tax study and closed out the corporate, employment, and excise tax 

studies as data perfection and publication efforts are underway. The NRP initiated the 

Tax Year 2015 individual income tax study and small business classifiers reviewed 

and identified issues for examination on more than 7,000 cases. The NRP also 

conducted three additional classification sessions and final data perfection for Tax 

Year 2012 is complete and the information is being analyzed for publication. 

 Received approval to begin hiring to build out the IRS analytic footprint. This 

important long-term sustained support will aid RAAS in meeting its mission and 

vision to lead a data-driven culture through innovative and strategic research, 

analytics, statistics, and technology services to support effective and efficient tax 

administration in partnership with internal and external stakeholders as a 

world-leading applied taxation science organization. 

 
IRS-60 

FY 2019 Changes by Budget Activity 

Dollars in thousands 

Shared Services and Support FTE Amount 

FY 2018 Annualized CR Level 4,588 $994,559 

Changes to Base 

Maintaining Current Levels (MCLs) $10,364 

Pay Annualization 3,075 

Non-Pay 7,289 

Efficiency/Savings $13 

Increase e-File Savings 13 

Other Adjustments $11 

Base Adjustments 11 

Subtotal FY 2019 Changes to Base $10,388 

FY 2019 Current Services 4,588 $1,004,947 

Program Changes 

Program Increases 

Stabilize, Secure and Transform IT Operations $964 

Cyber Security 66 

Identity Assurance - e-Authentication Enhancements and Authorization Integration 139 

Stabilize IT Operations 759 

Subtotal FY 2019 Program Increases $964 

Total FY 2019 Request 4,588 $1,005,911 

See footnotes in 1.1 – Appropriations Detail Table 

2.1.7 – Budget and Performance Report and Plan 

 

Shared Services and Support FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019

Resource Level Actual Actual Actual Actual Enacted Annualized 

CR Request

Appropriated Resources1 $1,097,565 $1,127,931 $1,126,230 $1,090,192 $991,504 $994,559 $1,005,911

Reimbursable Resources2 17,175 19,886 17,126 19,443 19,194 23,580 21,399

User Fees2 31,644 7,819 1,768 1,000 1,000 1,000 1,000

Budget Activity Total $1,146,384 $1,155,636 $1,145,124 $1,110,635 $1,011,698 $1,019,139 $1,028,310

1

The FY 2013 - FY 2017 appropriated resources line represents the approved operating plan including any inter-BAC transfers and inter-appropriation transfers.

2

The FY 2013 - FY 2017 columns represent realized resources for reimbursables and user fees.

Dollars in thousands
IRS-61 

2H – Information Services ($2,289,827,000 in direct appropriations, $20,737,000 in 

reimbursable resources, and an estimated $396,000,000 from user fees): This budget activity 

funds staffing, equipment, and related costs to manage, maintain, and operate the information 

systems critical to the support of the tax administration programs including taxpayer service 

and enforcement programs. This includes the design and operation of IT security controls and 

disaster recovery planning. This budget activity funds the development and maintenance of 

the millions of lines of programming code that support all aspects and phases of tax 

processing and the operation and administration of mainframes, servers, personal computers, 

networks, and a variety of management information systems. This funding allows the IRS to 

maintain a complex ecosystem comprised of more than 500 applications that remain essential 

to tax administration until modernized. This funding also allows the IRS to operate one of the 

largest call centers in the country, which relies on telecommunications and network 

infrastructure funded through this budget activity. These call centers rely on IT systems and 

data that are key to all IRS functions. 

IT is responsible for information systems and technology, ranging from cyber security and 

networks to applications development and end user equipment and services. The program 

activities include: 

 Application Development performs the analysis, design, development, testing, and 

implementation of about 550 applications supporting tax processing, management 

information reporting, and financial management support systems. It supports 

external trading partner data exchanges with Federal Government agencies, state and 

local governments, and other third-party entities. It controls application source code 

and deploys applications to the production environment. 

 Cybersecurity delivers IT security services to ensure compliance with federal statutory 

and regulatory requirements governing confidentiality, integrity, and availability of 

electronic systems, services, and data. Cybersecurity tracks compliance, continuously 

monitors risk, and provides remediation to manage IT Security Program in accordance 

with the Federal Information Security Management Act. 

 Enterprise Operations designs, develops, and maintains IT that supports critical tax 

processing, management information reporting, and financial management support 

systems for the IRS. It supports data exchanges with external organizations, such as 

other federal agencies, state and local governments, and external entities (e.g., 

employers and banks), and includes a comprehensive disaster recovery capability to 

ensure continued operations in the event of a major interruption of service. 

 Enterprise Program Management Office (EPMO) manages the delivery of integrated 

solutions for several of the IRS’s large-scale programs. It plays a key role in 

establishing change, configuration, and release plans and implementing new system 

functional capabilities. The EPMO is the partner with the business for programs under 

their purview and works with IT delivery partners (AD, ES, EOPS and the other ACIO 

areas) to deliver capabilities. This positions each organization to maintain a strong 

core function to optimize their operations. 

 Enterprise Services plans and manages service and delivery methods used across the 

IT organization, including demand analysis, enterprise architecture, configuration 
IRS-62 

management, project reporting, enterprise life cycle management, release 

management, systems engineering, dashboard reporting, and internal management. 

 IT Executive Oversight supports the continued transformation of the IT organization 

while helping drive the successful implementation of multiple initiatives and is 

responsible for overseeing day-to-day operations of the organization and providing 

strategic and operational oversight for many functions within IT. 

 IT Infrastructure provides a centrally managed investment program for the 

replacement of IRS IT infrastructure that has reached or surpassed its useful life cycle. 

 Strategy and Planning collaborates with IT leadership to provide policy, direction, and 

administration of essential programs, including strategy and capital planning, strategic 

planning and performance measurement, financial management services, vendor and 

contract management, requirements and demand management, and risk management. 

The organization partners with IRS leadership and external stakeholders to ensure 

selection, planning and management of an IT investment portfolio that is driven by the 

strategic priorities of the IRS and demonstrates business value. 

 Treasury Franchise Fund (TFF) is a centralized program that pays for services IT 

receives from Treasury through the Treasury Franchise Fund. 

 User and Network Services (UNS) provides end-user support in accordance with 

negotiated service level agreements, strategic direction, forecasting, planning and 

oversight of IT business needs, and ensures compliance with government security 

regulations. UNS supplies and maintains all desk-side technology, equips the 

Volunteer Income Tax Assistance Program; establishes and provides oversight of 

hardware and software standards; and manages the architecture, design, and 

engineering of the IRS network infrastructure. 

Description of Performance 

All IRS programs rely heavily on information systems funded in this account. These systems 

process tax and information returns, account for tax revenues collected, send bills for taxes 

owed, issue refunds, assist in the selection of tax returns for audit, and provide 

telecommunication services. It also funds disaster recovery activities to ensure continued 

operations in the event of a major interruption of service. 

In FY 2017, the IRS: 

 Deployed additional FATCA information technology capabilities in support of 

legislative mandates. The new functionality improves Foreign Account Tax 

Compliance Act (FATCA) forms, reporting features, and overall interfaces. For the 

first time, technology allows entities to enter an agreement with the IRS to become a 

Qualified Intermediary (QI), Withholding Foreign Partnership (WP), or a Withholding 

Foreign Trust (WT) via an electronic system. This release allows QI/WP/WTs to 

maintain account information, as well as apply, renew, or terminate agreements with 

the IRS electronically. As of the September 30, 2017 due date for renewals, nearly 

4,600 QIs, WPs and WTs had used the new application to renew their agreements. In 
IRS-63 

addition, about 290,000 foreign financial institutions (FFIs) registered with the IRS 

and received a global intermediary identification number (GIIN) via the FFI 

Registration application. More than 6,500 financial institutions and 97 host country 

tax authorities enrolled in the International Data Exchange Service (IDES) to submit 

FATCA information returns to the IRS, and more than 550 QIs completed their online 

application via the QI application. 

 Worked with Security Summit partners from state tax agencies and the broader tax 

community to add extra layers of security for the filing season; processed 201 million 

returns and billions of dollars in tax refunds with these security protections in place; 

 Acquired the infrastructure to support a multilayered defense architecture to provide 

the Computer Security Incident Response Center (CSIRC) and the Insider Threat 

Operations team the ability to leverage powerful analytic applications to improve 

investigation effectiveness; 

 Continued to build robust cybersecurity programs to improve the identification and 

prevention of refund fraud and identity theft and to enhance cybersecurity to safeguard 

taxpayer data; 

 Detected and mitigated 1,305 phishing and malware sites. During this time, the IRS 

identified and responded to 542 cyber incidents of which 128 incidents (about 

24 percent) involved removable media, email, and web-based activity. The IRS also 

implemented 1,876 content filtering restrictions to mitigate Internet content deemed a 

security risk to IRS information systems. Despite these incidents, IRS systems remain 

secure; 

 The improvements enhanced the IRS’s ability to handle data from the insurance 

marketplaces, allowing the IRS to process more than two times the number of bulk 

files as in prior years, resulting in increased responsiveness to the Health and Human 

Services/Centers for Medicare & Medicaid Services and state exchanges; and 

 Completed information technology system upgrades related to Affordable Care Act 

that improved both the stability and capacity of the processing systems. The 

improvements enhanced the IRS’s ability to handle data from the insurance 

marketplaces, allowing the IRS to process more than two times the number of bulk 

files as in prior years, resulting in increased responsiveness to the Health and Human 

Services/Centers for Medicare & Medicaid Services and state exchanges. 

Security 

Security of taxpayer data and providing a secure environment for employees are of utmost 

importance to the IRS. In FY 2017, the IRS: 
IRS-64 

 Enhanced the security of its networks through the use of cyber-threat forensics, 

implementation of a comprehensive patch management system, and the adoption of 

government-wide information security continuous monitoring tools as part of a 

layered defense. In addition, the IRS is instituting multiple layers of electronic 

authentication at the time of filing. Investments and activities in this area help combat 

stolen identity refund fraud and include detection and prevention assistance to victims 

and law enforcement; and 

 Improved authentication for online taxpayer services by adding more applications 

behind Secure Access, a tool that enhances security while providing greater access for 

legitimate taxpayers and improving the customer experience. The IRS stood up the 

Secure Access e-Authentication capability to protect the Get Transcript Online 

application in June 2016. Since then, the IRS has added several applications behind 

Secure Access, including Identity Protection Personal Identification Number (IP PIN), 

the Taxpayer Digital Communications pilot, Qualified Intermediary Registration and 

Management, and Online Account with functions such as See Balance Due and a link 

to Make a Payment. 

 
IRS-65 

FY 2019 Changes by Budget Activity 

Dollars in thousands 

Information Services FTE Amount 

FY 2018 Annualized CR Level 6,225 $2,071,985 

Changes to Base 

Maintaining Current Levels (MCLs) $27,019 

Pay Annualization 4,748 

Non-Pay 22,271 

Efficiency/Savings ($115) 

Increase e-File Savings (115) 

Reinvestment $12,798 

Support Aging IT Infrastructure 12,798 

Other Adjustments ($11) 

Base Adjustments (11) 

Subtotal FY 2019 Changes to Base $39,691 

FY 2019 Current Services 6,225 $2,111,676 

Program Changes 

Program Increases 

Stabilize, Secure and Transform IT Operations 146 $178,151 

Cyber Security 10 39,784 

Identity Assurance - e-Authentication Enhancements and Authorization Integration 21 23,846 

Aging Technology Infrastructure 39,000 

Migration to Cloud Services 20,000 

Stabilize IT Operations 115 55,521 

Subtotal FY 2019 Program Increases 146 $178,151 

Total FY 2019 Request 6,371 $2,289,827 

See footnotes in 1.1 – Appropriations Detail Table 

2.1.8 – Budget and Performance Report and Plan 

Information Services FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019

Resource Level Actual Actual Actual Actual Enacted Annualized 

CR Request

Appropriated Resources1 $1,722,172 $1,749,110 $1,641,360 $1,883,667 $1,988,010 $2,071,985 $2,289,827

Reimbursable Resources2 8,850 4,734 24,262 19,660 35,307 41,375 20,737

User Fees2 145,027 198,206 373,610 263,250 201,584 396,000 396,000

Budget Activity Total $1,876,049 $1,952,050 $2,039,232 $2,166,577 $2,224,901 $2,509,360 $2,706,564

1

The FY 2013 - FY 2017 appropriated resources line represents the approved operating plan including any inter-BAC transfers and inter-appropriation transfers.

2

The FY 2013 - FY 2017 columns represent realized resources for reimbursables and user fees.

Dollars in thousands
IRS-66 

Business Systems Modernization 

Appropriation Description 

The Business Systems Modernization (BSM) appropriation provides resources for the 

planning and capital asset acquisition of IT to modernize the IRS business systems. 

The BSM budget request for FY 2019 is $110,000,000 in direct appropriations and 516 FTE. 

This is a decrease of $178,031,000, or 61.81 percent less than the FY 2018 Annualized 

Continuing Resolution level of $288,031,000. 
IRS-67 

2.1 – Budget Adjustments Table 

Dollars in thousands 

Business Systems Modernization 

 

Summary of Proposed FY 2019 Request FTE Amount 

FY 2018 Annualized CR Level 516 $288,031 

Changes to Base 

Maintaining Current Levels (MCLs) $172 

Pay Annualization 172 

Subtotal FY 2019 Changes to Base $172 

FY 2019 Current Services 516 $288,203 

Program Changes 

Program Decreases 

Realignment from BSM to Operations Support (178,203) 

Subtotal FY 2019 Program Decreases ($178,203) 

Total FY 2019 Budget Request 516 $110,000 

See footnotes in 1.1 – Appropriations Detail Table 
IRS-68 

2.2 – Operating Levels Table 

Dollars in thousands 

Business Systems Modernization 

Object Classification 

FY 2017 

Enacted 

FY 2018 

Annualized CR 

FY 2019 

Request 

11.1 Full-Time Permanent Positions 70,301 64,453 63,974 

11.3 Other than Full-Time Permanent Positions 1,115 103 74 

11.5 Other Personnel Compensation 1,000 935 1,114 

11.9 Personnel Compensation (Total) 72,416 65,491 65,162 

12.1 Personnel Benefits 21,848 19,409 19,051 

Total Personnel and Compensation Benefits $94,264 $84,900 $84,213 

21.0 Travel 204 330 306 

25.1 Advisory & Assistance Services 193,374 173,429 22,452 

25.2 Other Services 148 25 19 

25.3 Purchase of Goods & Services from Govt. Accounts 11 9 7 

25.7 Operation & Maintenance of Equipment 296 2,168 309 

26.0 Supplies and Materials 20 7 6 

31.0 Equipment 1,683 27,163 2,688 

Total Non-Personnel $195,736 $203,131 $25,787 

New Appropriated Resources $290,000 $288,031 $110,000 

Budget Activities 

Business Systems Modernization 290,000 288,031 110,000 

New Appropriated Resources $290,000 $288,031 $110,000 

FTE 557 516 516 

See footnotes in 1.1 – Appropriations Detail Table 
IRS-69 

2.3 – Appropriation Detail Table 

2I – Business Systems Modernization ($110,000,000 in direct appropriations, and 

$34,000,000 in user fees): This budget activity funds the planning and capital asset 

acquisition of information technology (IT) to modernize IRS business systems, including 

labor and related contractual costs.

BSM uses best practices and expertise in business solutions and internal management to 

develop a world-class tax administration system. The following projects are supported by the 

FY 2019 BSM request of $110 million in direct appropriations and $34 million in user fees: 

Customer Account Data Engine 2 (CADE2) +$40.3 million (+$30.3 million in direct 

appropriation / +189 FTE and +$10.0 million user fees): These funds will be used to 

establish the foundation for a modernized tax processing engine by converting the core 

Individual Master File functions of posting, settlement, and analysis (runs 12 and 15) into 

Java-based programs and continue efforts to make CADE 2 the legal and financial 

authoritative source of individual taxpayer data. 

 

Enterprise Case Management (ECM) +$23.5 million (+$9.5 million in direct appropriations / 

+57 FTE, and +$14.0 million user fees): ECM is a business-driven transformation program 

that will address the need to modernize, upgrade, and consolidate case management systems 

with similar functionality that are running in the IRS ecosystem today. The IRS has over 

60 legacy case management systems with similar functionality. Historically, these were 

developed for individual Business Operating Divisions, as stand-alone systems. This project 

will consolidate case management systems onto an enterprise platform with common 

infrastructure, with common Business functions and services. The IRS expects taxpayer and 

operational benefits by making more case information available to front-line IRS employees 

to simplify interactions between the IRS and taxpayers. 

In FY 2019, ECM plans to develop a Roadmap to the ECM Target State via a series of ECM 

Transition States and initiate development of the first program release. This will begin the 

process of migrating business capabilities to the new platform. 

Enterprise Case Selection (ECS) +$2.5 million in direct appropriations / +15 FTE: The ECS 

program will implement an enterprise solution for performing case selection functions using a 

common infrastructure platform and common services that will be leveraged across the IRS. 

The ECS program will increase operational efficiencies by consolidating separate case 

Dollars in thousands

B usiness Systems M o dernizatio n

Appropriated Resources

FTE AM OUNT FTE AM OUNT FTE AM OUNT FTE AM OUNT FTE AM OUNT FTE AM OUNT

N ew A ppro priated R eso urces:

Business Systems M odernization 557 $290,000 557 166,263 516 288,031 516 110,000 (178,031) -61.81%

Subto tal N ew A ppro priated R eso urces 557 $ 290,000 557 $ 166,263 516 $ 288,031 516 $ 110,000 ($ 178,031) -61.81%

Other Resources:

User Fees 25,464 34,000 34,000

Recovery from Prior Years 3,854 3,854

Unobligated Balances from Prior Years 123,010 190,671 236,919 46,248 24.26%

Subtotal Other Resources $ 148,474 $ 228,525 $ 274,773 $ 46,248 20.24%

T o tal B udgetary R eso urces 557 $ 438,474 557 $ 166,263 516 $ 516,556 516 $ 384,773 ($ 131,783) -25.51%

1See footnotes in 1.1 – Appropriations Detail Table

F Y 2018

Annualized CR

F Y 2017

Enacted

F Y 2017

Actual

C hange % C hange

F Y 2018 to F Y 2019 

Request

F Y 2018 to F Y 2019 

Request

F Y 2019

Request
IRS-70 

selection functions and by identifying the best cases allowing the IRS to use resources more 

effectively. 

Return Review Program (RRP) +$8.4 million in direct appropriations / +48 FTE: RRP 

provides leading-edge technologies to advance the IRS effectiveness in detecting, addressing, 

and preventing tax refund fraud and protecting U.S. Treasury revenue. The RRP fraud 

framework is critical for IRS’ success in tackling ever-evolving tax schemes in a 

sophisticated, scalable and adaptable manner. Investment in RRP will continue to improve 

and expand analytical capabilities that protect increasing levels of revenue from individual 

and business tax return fraud, non-compliance, and other enterprise anomaly 

detection. Additionally, IRS will implement value-driven enhancements based on Business 

priorities, enabling other business customers to explore and use RRP for anomaly detection 

business processes. 

Web Applications +$25.1 million (+$15.1 million in direct appropriations / +96 FTE, and 

+$10 million user fees): Web Apps will simplify the taxpayer’s online experience, provide 

secure digital communications, and add more interactive capabilities to existing web 

self-service products. This will allow taxpayers to resolve more issues online, requiring fewer 

direct interactions with the IRS over the telephone and in person. 

In FY 2019, Web Applications will continue to develop and deploy new capabilities selected 

by the program’s product prioritization process. Anticipated functionalities include the ThirdParty Access Tool (TPAT), to permit access for authorized third parties to view and manage a 

taxpayer’s online account, and Third-Party Refund application program interface, to increase 

the number of tax services available to third parties and expand the definition of third party to 

include other federal and state government agencies, as well as commercial tax preparers. 

Additionally, Web Applications will continue to provide a user-centric, data-informed 

approach to ensure that taxpayer information is being presented and provided in a way that is 

easy for a taxpayer to interpret. This will include the release of new and continuing 

applications providing a wide variety of services to the taxpayer that will provide a better user 

experience, clearer content, an enhanced portal, and more robust analytics to continuously 

improve the taxpayer experience. 

Architecture, Integration and Management (AI&M) +$19.7 million in direct appropriations / 

+42 FTE: AIM provides engineering management capabilities essential to delivering a 

program of BSM’s magnitude and complexity. It also delivers IRS systems strategy, 

architecture, and engineering capabilities for the major modernization projects across all 

technology platforms--IT Infrastructure, Business Applications, Data Management, and IT 

Security. The AI&M program translates enterprise and project objectives into targeted, 

actionable investments to provide the framework and direction for cohesive, successful 

modernization. 

Core Infrastructure +$19.5 million in direct appropriations / +69 FTE: Core Infrastructure 

provides mission-critical services for designing, engineering, testing, and deploying 

standardized, consolidated, virtual, and secure modernized development and production 

environments for use by BSM projects. This support effort scales with the development 

projects in the BSM portfolio. 
IRS-71 

The IRS is modernizing taxpayer applications to web-based technologies that allow taxpayers 

to communicate with the IRS using commercially available technology. The modernized 

infrastructure provides a complete environment (hardware, software, processes, and 

management) for developing, testing, deploying, operating, and monitoring both customer and 

internal applications in support of business practices. This includes continuing to update the 

web portal environment and standardizing services, security, and operations management. 

This approach facilitates the IRS’s ability to develop a shared infrastructure and common 

business service solutions that are usable across multiple BSM projects. 

Management Reserve +$5 million in direct appropriations 

The management reserve funds allow the IRS to cover unanticipated cost adjustments. 

 
IRS-72 

Description of Performance 

The IRS’s modernization efforts focus on building and deploying advanced information 

technology systems, processes, and tools to improve efficiency and productivity. IRS 

performance metrics are described quarterly and in greater detail in the BSM IT 

Modernization report. 

Percent of Major IT Investments within +/- 10 percent Cost Variance at the Investment 

Level: Nine of 18 major investments (50 percent) were within the cost variance threshold at 

the end of FY 2017 and below the 90 percent target. Shown below are the Investments falling 

short of the Cost Variance target. 

 Affordable Care Act Administration (ACA) had a much lower actual cost versus 

planned cost associated with milestone 4B.4. 

 Customer Account Data Engine 2 (CADE 2) cost underrun is due to project 

activities associated with release 4 and 5 being stopped due to budgetary constraints. 

 e‐Services (e‐SVS) had lower than expected cost due to fewer than expected 

legislative changes. 

 Enterprise Case Management (ECM) shows a variance because the ECM 

governance board approved halting the development efforts for ECM fraud case 

management. 

 Integrated Financial System/CORE Financial System (IFS) shows a cost overrun 

due to a software acquisition expense that was planned in milestones 1 and 2 but 

didn’t happen until milestones 3 and 4a due to procurement competition that took 

longer than planned. 

 IRS Mainframes and Servers Services and Support (MSSS) displays a cost 

underrun due to activities being closed out or put on hold due to budgetary constraints. 

 IRS Telecommunications Systems and Support (TSS) had a cost underrun due to 

several activities costing less than planned. 

 Return Review Program (RRP) is showing a cost underrun due to the reporting 

portion of the Reporting and Transaction Processing (RTP) functionality being 

deferred to a future release. 

 Web Applications is showing over budget due to the baseline not reflecting the 

funded budget (funded higher than baseline). 

Fiscal Year

Percent within +/- 10% 

Cost Variance

Percent within +/- 10%

Schedule Variance

2017 50.0 % 88.9 %

Major IT (BSM and Non-BSM) Investments
IRS-73 

Percent of Major IT Investments within +/- 10 percent Schedule Variance at the 

Investment Level: Sixteen of 18 major investments (88.9 percent) were within the schedule 

variance threshold at the end of FY 2017. Shown below are the Investments falling short of 

the Schedule Varian target. 

 Individual Master File (IMF) is ahead of schedule due to filing season activities 

being completed before their projected timeframes.

 IRS Mainframes and Servers Services and Support (MSSS) displays a schedule 

variance due to activities being closed out or put on hold due to budgetary constraints.

IRS IT will continue to monitor program activities closely and address any issues associated 

with cost/schedule on a timely basis to meet the FY 2018 and FY 2019 target of 90 percent. 

FY 2019 Changes by Budget Activity 

Dollars in thousands 

Business Systems Modernization FTE Amount 

FY 2018 Annualized CR Level 516 $288,031 

Changes to Base 

Maintaining Current Levels (MCLs) $172 

Pay Annualization 172 

Subtotal FY 2019 Changes to Base $172 

FY 2019 Current Services 516 $288,203 

Program Changes 

Program Decreases 

Realignment from BSM to Operations Support (178,203) 

Subtotal FY 2019 Program Decreases ($178,203) 

Total FY 2019 Request 516 $110,000 

See footnotes in 1.1 – Appropriations Detail Table 

2.1.9 – Budget and Performance Report and Plan		

Business Systems Modernization FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019

Resource Level Actual Actual Actual Actual Enacted Annualized CR Request

Appropriated Resources1 $198,205 $145,235 $107,746 $190,945 $290,000 $288,031 $110,000

Reimbursable Resources2

User Fees 25,464 34,000 34,000

Budget Activity Total $198,205 $145,235 $107,746 $190,945 $315,464 $322,031 $144,000

1

The FY 2013 - FY 2017 appropriated resources line represents the approved operating plan including any inter-BAC transfers and inter-appropriation transfers.

2

The FY 2013 - FY 2017 columns represent realized resources for reimbursable resources and user fees.

Business Systems Modernization FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2017 FY 2018 FY 2019

Measures Actual Actual Actual Actual Actual Target Target Target

0.0% 66.7% 73.7% 76.2% 50.0% 90.0% 90.0% 90.0%

83.3% 100.0% 89.5% 85.7% 88.9% 90.0% 90.0% 90.0%

Key: E - Efficiency Measure

Dollars in thousands

1

Starting in FY 2015, the measure includes all major investments (BSM and non-BSM).

Percent of Major IT Investments within +/- 10% Schedule Variance at 

the Investment Level1

Percent of Major IT Investments within +/- 10% Cost Variance at the 

Investment Level1
 IRS-74

Section III – Supplemental Information 

3.1 – Summary of Capital Investments 

A summary of capital investment resources, including major information technology and 

non-technology investments, can be viewed/downloaded at: 

http://www.treasury.gov/about/budget-performance/pages/summary-of-capitalinvestments.aspx. 

This website also contains a digital copy of this document. 

3A – Capital Investment Strategy 

The IRS capital investment strategy translates the IRS’s business vision into the required 

technical capabilities, and structures a set of IT investments that will advance those capabilities. 

The IRS is developing a strategic, enterprise-wide planning initiative that describes the IRS 

vision for interacting with taxpayers and stakeholders in a more timely and open manner by 

understanding and meeting taxpayer needs, promoting voluntary compliance, and detecting, 

deterring, and resolving non-compliance. Figure 1 illustrates the relationships between the 

Strategic Plan goals and future capabilities and initiatives. 

The IRS Technology Roadmap: Uses enterprise architecture planning and visualization 

methods to depict and describe the future direction of IRS technology in terms of advancing 

capabilities, modernizing applications and technical services, and upgrading the technology 

product environment through a set of programs and projects and new approaches such as Agile 

development and DevOps. It uses a set of models and visualizations to show the transition from 

the current environment to the future technology vision. It promotes dialogue between IT and 

business leaders on the priorities, direction and alignment of investments and resources. It is a 

living document that is reviewed and updated as appropriate. As depicted in Figure 2, the 

Technology Roadmap is structured around six core IRS business areas (Intake, Account 
IRS-75 

Management, Compliance, Case Management, Customer Service, and Internal Operations) and 

four technical areas (Data, Service Orchestration, Infrastructure, and Security). 

To move efficiently and effectively toward the technology vision described in the Technology 

Roadmap, the IRS IT organization has developed its IT Vision to articulate and formalize key 

themes and goals essential to IT’s performance as a world-class service provider to its business 

partners. This vision, summarized in Figure 3, emphasizes a strong and well-equipped 

workforce, agile and efficient service delivery processes, data-driven operations and 

decision-making, and a critical focus on cybersecurity. The IT Vision is further augmented by a 

set of architectural principles, also summarized in the diagram below, to guide appropriate 

investment decisions, and to acquire, design, build, and implement technology solutions. 
IRS-76 

In the current budget planning and investment cycle, IRS IT has identified several cross-cutting 

strategic IT initiatives and major programs, described below. 

Cloud: In response to the U.S. CIO directive of a ‘cloud first’ policy, the IRS is defining and 

implementing a cloud strategy to adopt cloud technologies that enable the delivery of secure, 

agile, and efficient service offerings to the enterprise and the taxpayer. This move toward 

enterprise-wide cloud adoption will provide the IRS with convenient, on-demand network 

access to a shared pool of configurable computing resources (e.g., networks, servers, storage, 

applications, and services) that can be provisioned rapidly and released with minimal 

management effort or service provider interaction. Expected IRS benefits include: more agile 

infrastructure procurements; reduced operational overhead; more efficient resource sharing; and 

improved infrastructure currency. 

DevOps: DevOps is an emerging software engineering practice that aims to unify the software 

development and operation processes, teams, and communications. The IRS’s shift toward a 

DevOps culture requires changes to workflow, infrastructure management, solution creation, 

and deployment. IRS IT is addressing DevOps through six practice areas: Configuration 

Management, Continuous Integration, Automated Testing, Software Defined Infrastructure, 

Continuous Delivery, and Continuous Monitoring. Expected IRS benefits include: improved 

internal IT and stakeholder collaboration; faster delivery through compressed cycles; improved 

quality through better testing; and enhanced transparency to manage risks. 

Data Strategy: Combating identity theft, detecting tax filing issues more quickly, improving 

taxpayer service, and optimizing compliance and enforcement actions require robust, secure, 

and integrated data capture, storage, processing, and analytics capabilities. The current IRS data 

environment is constrained in its ability to provide a holistic and secure taxpayer data view for 

emerging tax administration and compliance needs. The IRS is assessing and redesigning its 
IRS-77 

data strategy and architecture to harness key industry trends more fully, such as big data 

technologies, self-service analytics, data lakes, and cognitive computing. Expected IRS benefits 

include: improved insights from data through analytics, reduced data movement and duplication 

to maximize performance and scalability, improved enterprise data standardization and 

integration, and security of data at rest and in motion. 

NextGen Infrastructure: At the foundation of the IRS’s critical systems and data is an 

infrastructure base (i.e., hardware, software, programming languages) that is aged and in need 

of modernization, which puts the American tax system at risk of failure. Such conditions 

introduce security risks, excessive system downtime, elimination of vendor support, and 

incompatibilities across systems and programs. The IRS Executive Risk Committee elevated 

the aging IRS technology infrastructure as the highest-priority enterprise risk. To address this 

challenge, the IRS is shifting towards cloud computing, hyper-converged and composable 

infrastructure, hybrid on-premises / cloud infrastructure environment, and continuous operations 

monitoring technologies. Key IRS benefits include: increased IT infrastructure availability and 

reliability; enhanced business continuity and disaster recovery; reduced IT asset cost and 

operational expenses; and faster, more scalable, and efficient IT service delivery. 

Application Program Interface (API) Strategy: The IRS is defining and implementing an 

API strategy to enable rapid creation of reusable granular APIs to export key sets of data. To 

address its complex landscape of 500+ legacy applications and aging technology, the IRS is 

developing a scalable application and data integration approach to support emerging tax 

administration and compliance requirements. Harnessing industry advances such as micro 

service APIs and their scalability through containerization and cloud computing, the IRS API 

strategy focuses on providing a platform of reusable APIs that are individually scalable and 

fault tolerant. Key IRS benefits include: increased reuse of software functionality in many 

different contexts; improved agility in meeting user needs; accelerated deployment of new 

capabilities; and reduction of redundant functionality. 

Cybersecurity Strategy: The IRS’s mission of tax administration relies heavily upon the 

confidentiality, integrity and availability of information to achieve mission objectives. It is 

imperative that the IRS implement and sustain a robust security strategy in an ever-evolving 

threat and technology environment. Congress and the Administration have made cybersecurity 

one of their highest priorities. The IRS is adopting a proactive and analytics-driven approach to 

implement new offensive and defensive strategies to meet emerging security needs. The IRS is 

implementing Continuous Diagnostics & Mitigation (CDM) software to automate security 

controls and standardize risk reporting across federal agencies, and to provide near real-time 

status and mitigation of deficiencies. Additionally, the IRS is adopting a predictive analytics 

approach to analyze the machine data, user access, and usage pattern (behavior) data to mitigate 

risks posed by insider threats. The IRS also is implementing two-factor authentication to 

protect the confidentiality, integrity, and availability of remote data transmissions that contain 

sensitive taxpayer information. 

Web Applications (WebApps): IRS is developing Web Applications to improve interactions 

and communications with taxpayers, employers, and third parties by providing a broad range of 

self-service options, establishing secure information exchange options, and building internal 

capabilities. By enabling third parties and taxpayers to interact digitally with the IRS, the 
IRS-78 

investment will provide a better user experience, achieve significant savings by moving services 

to lower cost channels, and deliver consistent data and services through reusable application 

programming interfaces (APIs). Web Apps will continue to work on the account Balance Due, 

See Payments, Make a Payment and Download Tax Data capabilities. The IRS also will begin 

work on two new account features: Taxpayer Protection Program Identity Verification Tool and 

Installment Agreement for individual taxpayers. This program will facilitate voluntary 

compliance by empowering taxpayers with innovative tools and support. 

Enterprise Case Management (ECM): ECM is a business-driven transformation program that 

will address the need to modernize, upgrade, and consolidate case management systems with 

similar functionality that are running in the IRS ecosystem today. The IRS has over 60 legacy 

case management systems with similar functionality. Historically, these were developed for 

individual Business Operating Divisions as stand-alone systems. This project will consolidate 

case management systems onto an enterprise platform with common infrastructure, business 

functions, and services. The IRS expects taxpayer and operational benefits by making more 

case information available to front-line IRS employees to simplify interactions between the IRS 

and taxpayers. 

Integrated Enterprise Portal (IEP) / IRS.GOV- Portal: The IRS.gov portal provides 

seamless one-stop web-based services to internal and external users. The modernization of the 

IRS.gov infrastructure enables landing page access to services for taxpayers, tax preparers, 

businesses, practitioners, electronic return originators, and IRS employees. IEP’s strategy for 

infrastructure modernization also supports the IRS’s Cloud-First strategy and will support future 

application portability through cloud technologies. IEP will ensure ease of access to IRS.gov 

services, and is necessary to ensure the security of IRS stakeholder data. 

Return Review Program (RRP): RRP is leveraging leading-edge technologies to advance the 

IRS’s effectiveness to detect, resolve, and prevent criminal and civil tax refund fraud and 

non-compliance, maximize fraud detection in real-time, and protect revenue from the risks of 

increasing global fraud sophistication. RRP is mission-critical for the IRS to combat 

ever-evolving tax fraud schemes in a sophisticated, scalable, and adaptable manner, and will be 

the anomaly detection platform for the enterprise for both pre-refund and post-refund fraud and 

non-compliance. RRP correlates data across multiple data sources and enables the IRS to create 

predictive models for fraud and non-compliance. RRP generates a scorecard for questionable 

returns, evaluating consistency and dependability. RRP also will support the Business 

Operating Divisions’ ability to perform self-service analytics to facilitate rapid deployment of 

new rules and models for fraud and non-compliance, and will increase efficiencies to assist in 

the selection and prioritization of workload management. 

Authentication, Access, and Authorization (eA3): eA3 is designed to provide secure access to 

IRS web-based applications and data through user authentication, authorization, and access 

capabilities that underpin all secure digital interactions for individuals, businesses, third parties, 

tax professionals, and other IRS trusted network participants. With an increase in IRS services 

delivered through internet channels, eA3 manages the risk of identity theft, fraudulent activity, 

and improper use of IRS information by enhancing detection and remediation capabilities 

within the IT security environments. eA3 provides a shared Enterprise Service / platform that 

can be used by new and existing, internal and external applications to provide authorization to 
IRS-79 

users and services. Future objectives include improving the security and capacity of the 

enterprise authentication framework and protecting additional applications. 

Foreign Account Tax Compliance Act (FATCA): The FATCA program supports legislation 

that promotes disclosure of foreign accounts held by U.S. taxpayers and integrates this 

information into current IRS compliance activities. FATCA introduces new reporting 

requirements for U.S. taxpayers and Foreign Financial Institutions (FFIs). The legislation 

requires U.S. taxpayers holding foreign financial assets to report information to the IRS 

annually, and for FFIs with U.S. taxpayer accounts to register, report annually to the IRS, and 

withhold a portion of income that is sent to the IRS. These complementary provisions create a 

web of international tax accountability, allowing the IRS to gather and analyze information 

from multiple sources, bolstering the compliance of U.S. taxpayers with assets overseas. IT will 

continue to operate and maintain the FATCA portfolio of systems, deliver new and enhanced 

business capabilities, reduce manual workarounds, leverage FATCA data to improve legislative 

compliance among individuals and institutions, and leverage existing capabilities to support 

emerging IRS initiatives. 

Customer Account Data Engine 2 (CADE 2): CADE 2 is IRS’s data-driven foundation for a 

future of state-of-the-art individual taxpayer account processing and data-centric technologies to 

improve service to taxpayers, enhance IRS tax administration, and ensure fiscal responsibility. 

At the heart of CADE 2 is a modernized relational database that aggregates individual taxpayer 

records and makes this data available to organizations across the IRS. Ultimately, CADE 2 will 

replace the Individual Master File (IMF) as the IRS’s authoritative data source for individual 

taxpayer data. 

3.2 – Return on Investment (ROI) for IRS Major Enforcement Programs 

The actual cost and actual revenue collected for FY 2012 through FY 2017 for the three major 

enforcement programs, Examination, Collection, and Automated Underreporter (AUR) are 

provided below. The activities included in these programs include: 

Examination Program conducts examinations of tax returns of individual taxpayers, 

businesses, and other types of organizations to verify that the tax reported is correct. This 

includes examinations of individuals, small businesses, self-employed, large corporate 

businesses, partnerships, international, estate and gift, excise tax and employment tax, taxexempt organizations, qualified pension benefit plans, and government entities. The 

examination costs include the cost of the Field Exam, Correspondence Exam, IRS Chief 

Counsel, and Appeals functions. 

Collection Program collects delinquent taxes and secures delinquent tax returns through the 

appropriate use of enforcement tools, such as lien, levy, seizure of assets, installment 

agreement, offer in compromise, substitute for return, summons, and IRC section 6020(b) 

(which allows the IRS to prepare returns if a taxpayer neglects or refuses to file), and provides 

education to taxpayers to enable future compliance. The cost of the Collection program 

includes Automated Collection System (ACS), Field Collection, and Payment 

Compliance/Correspondence Collection. 
IRS-80 

Automated Underreporter (AUR) Program matches payer information returns (Forms 1099, 

W-2, etc.) against data reported to the IRS on individual tax returns. The information is verified 

to identify any discrepancies. If a discrepancy is found, the case is given to a tax examiner for 

research and analysis. If the tax examiner is unable to resolve the discrepancy, the IRS issues a 

proposed notice and generates a proposed assessment. 

ROI is calculated by dividing revenue by cost. This information provides an indication of the 

ROI for the three major enforcement programs over time, but it is important to note that 

enforcement revenue collected in a fiscal year includes tax, interest, and penalties from multiple 

tax years. Some enforcement activities take more than a year to close and may generate revenue 

over several years, so it is generally inappropriate to compare revenue collected in a given fiscal 

year to the staffing available for that same year. 

In addition, it is important to note that these data reflect the average return on investment for 

these programs and do not include the indirect effects of IRS enforcement activities on 

voluntary compliance. As such, they are not intended to be used to allocate resources or 

maximize revenue. Net revenue is maximized only when resources are allocated according to 

marginal direct and indirect return on investment, but those ratios are much more challenging 

to estimate than the average ROI shown here. As a result, the IRS will continue to allocate 

enforcement resources across a range of enforcement activities to ensure taxpayers pay the taxes 

they owe. 

Return on Investment for IRS Major Enforcement Programs 

 

Dollars in Millions

Enforcement Program Cost1 Revenue ROI Cost1 Revenue ROI Cost1 Revenue ROI Cost1 Revenue ROI Cost1 Revenue ROI Cost1 Revenue ROI

IRS Total $6,242 $50,187 8.0 $5,883 $53,345 9.1 $5,839 $57,146 9.8 $5,644 $54,203 9.6 $5,592 $54,291 9.7 $5,506 $53,214 9.7

Examination 4,232 14,476 3.4 3,965 16,662 4.2 3,965 18,983 4.8 3,974 13,320 3.4 3,782 12,023 3.2 3,695 14,510 3.9

Collection 1,742 30,442 17.5 1,660 31,396 18.9 1,618 33,198 20.5 1,419 35,740 25.2 1,576 37,259 23.6 1,598 33,701 21.1

Automated Underreporter (AUR) 267 5,269 19.7 258 5,287 20.5 256 4,965 19.4 251 5,143 20.5 234 5,009 21.4 214 5,003 23.4

FY 2012 FY 2013 FY 2015 FY 2016 FY 2017

1

The cost of the enforcement programs was calculated using budget data from the IRS Integrated Financial System (IFS) and includes direct dollars and FTE from the 

Enforcement appropriation, Exam and Collections budget activity, and dollars from the Operations Support appropriation prorated using actual FTE realized for each major 

FY 2014
IRS-81 

3.3 – IRS Performance Measure Table 

Performance Measures FY2013 

Actual

FY2014 

Actual

FY2015 

Actual

FY2016 

Actual 

FY2017

Actual

FY2017 

Target 

FY2018 

Target 

FY2019 

Target

Customer Service Representative Level of Service 

(LOS) 60.5% 64.4% 38.1% 53.4% 77.1% 64.0% 75.0% 47.0%

Customer Contacts Resolved per Staff Year1 20,767 21,018 26,245 28,497 25,535 Baseline Baseline TBD

Customer Accuracy - Tax Law (Phones) 95.7% 95.0% 95.0% 96.4% 96.7% 95.0% 95.0% 95.0%

Customer Accuracy - Accounts (Phones) 96.0% 96.2% 95.5% 96.1% 96.0% 95.0% 95.0% 95.0%

Timeliness of Critical Filing Season Tax Products to 

the Public 58.9% 99.1% 89.0% 92.5% 93.1% 89.0% 89.0% 89.0%

Timeliness of Critical TE/GE & Business Tax Products 

to the Public 83.6% 98.7% 92.6% 98.0% 96.7% 91.0% 91.0% 91.0%

Percent Individual Returns Processed Electronically 82.5% 84.1% 85.3% 86.4% 86.9% 87.0% 88.0% 89.0%

Percent of Business Returns Processed 

Electronically 40.2% 43.1% 47.0% 50.0% 52.9% 51.0% 54.0% 56.0%

Refund Timeliness - Individual (Paper) 99.0% 98.7% 98.8% 98.7% 98.4% 97.0% 97.0% 97.0%

Enterprise Taxpayer Self-Assistance Rate1 83.3% 84.7% 88.7% 89.0% 79.0% Indicator Indicator Indicator

Examination Coverage - Individual 1.0% 0.9% 0.8% 0.7% 0.6% 0.6% 0.6% 0.6%

Field Exam Nat'l Quality Review Score 89.2% 88.4% 86.7% 86.8% 85.0% 86.7% 84.4% 86.7%

Office Exam Nat'l Quality Review Score 90.3% 90.6% 88.3% 88.4% 87.9% 86.7% 86.7% 88.3%

Examination Quality - Large Business2 92.0% 83.0% 86.0% 83.0% 78.0% 90.0% 90.0% 90.0%

Examination Coverage - Business (Assets > $10 

million) 5.6% 4.3% 3.9% 3.0% 2.5% 2.7% 2.4% 1.8%

Examination Efficiency - Individual 142 138 148 143 121 118 134 129

Automated Underreporter Efficiency 2,025 1,935 2,209 2,196 2,188 2,133 2,133 2,133

Automated Underreporter Coverage 2.8% 2.6% 2.3% 2.3% 2.2% 2.0% 1.9% 1.9%

Collection Coverage (Units) 47.0% 45.9% 46.3% 43.4% 42.2% 37.5% 38.6% 36.0%

Collection Efficiency (Units) 2,057 2,051 2,448 2,266 2,135 2,117 2,101 2,029

Field Collection Nat'l Quality Review Score 81.4% 81.6% 79.2% 79.2% 76.7% 79.7% 78.0% 78.0%

Automated Collection System Accuracy 94.4% 95.2% 95.3% 95.4% 94.7% 95.0% 95.0% 95.0%

Criminal Investigations Completed 5,557 4,606 4,486 3,721 3,089 3,100 3,000 2,900

Number of Convictions 3,311 3,110 2,879 2,672 2,300 2,100 1,900 1,800

Conviction Rate 93.1% 93.4% 93.2% 92.1% 91.5% 92.0% 92.0% 92.0%

TE/GE Determination Case Closures 65,877 136,746 111,940 99,973 102,749 95,791 94,103 88,886

Rentable Square Feet per Person (new for FY 2017) 297 Indicator Indicator Indicator

Percent of Major IT Investments within +/- 10% Cost 

Variance at the Investment Level 3 0.0% 66.7% 73.7% 76.2% 50.0% 90.0% 90.0% 90.0%

Percent of Major IT Investments within +/- 10% 

Schedule Variance at the Investment Level 3 83.3% 100.0% 89.5% 85.7% 88.9% 90.0% 90.0% 90.0%

2

 As a result of program changes that occurred in the Large Business and International (LB&I) organization, starting in FY 2013, a new Examination Quality - Large Business measure replaced the two 

previous LB&I quality measures - Examination Quality - Industry and Coordinated Industry.

3

 Starting in FY 2015, the measure includes all major investments (BSM and non-BSM).

1 Starting in FY 2017, the IRS modified the Customer Contacts Resolved per Staff Year (CCRPSY) and Enterprise Taxpayer Self Assistance Rate measures to include additional self-service channels. As 

new self-assistance applications are provided to the public, they will be added to the methodology. IRS saw taxpayer behavior changes in 2017 due to the PATH Act (re: refund hold) and expect to see 

additional impacts in 2018 due to the tax reform; in addition, IRS continues to evaluate the impact of changes to the web services measure in FY 2017. CCRPSY will be rebaselined for FY 2018.
IRS-82 

3.3 – IRS Performance Measure Table (Continued) 

 

Customer Service Representative (CSR) Level of 

Service

The number of toll free callers that either speak to a Customer Service Representative or receive informational 

messages divided by the total number of attempted calls.

Customer Contacts Resolved per Staff Year The number of Customer Contacts resolved in relation to staff years expended. 

Customer Accuracy – Tax Law Phones The percentage of correct answers given by a live assistor on Toll-free tax law inquiries.

Customer Accuracy – Customer Accounts 

(Phones) The percentage of correct answers given by a live assistor on Toll-free account inquiries.

Timeliness of Critical Individual Filing Season Tax 

Products to the Public

The percentage of critical individual filing season tax products (tax forms, schedules, instructions, publications, tax 

packages, and certain notices required by a large number of filers to prepare a complete and accurate tax return) 

available to the public in a timely fashion.

Timeliness of Critical TE/GE & Business Tax 

Products to the Public Percentage of critical other tax products, paper and electronic, available to the public in a timely fashion. 

Percent Individual Returns Processed 

Electronically The percentage of electronically filed individual tax returns divided by the total individual returns filed.

Percent Business Returns Processed 

Electronically The percentage of electronically filed business tax returns divided by the total business returns filed.

Refund Timeliness – Individual (Paper) The percentage of refunds resulting from processing Individual Master File paper returns issued within 40 days or less. 

Enterprise Taxpayer Self Assistance Rate The percentage of taxpayer assistance requests resolved using self-assisted automated services. IRS will use this as 

an indicator for FY 2017.

Examination Coverage – Individual (1040)

The sum of all individual 1040 returns closed by Small Business/Self Employed (SB/SE), Wage & Investment (W&I), 

Tax Exempt and Government Entities (TE/GE), and Large Business and International (LB&I) (Field Exam and 

Correspondence Exam programs) divided by the total individual return filings for the prior calendar year.

Field Exam Nat'l Quality Review Score The score awarded to a reviewed field examination case by a Quality Reviewer using the National Quality Review 

System (NQRS) quality attributes.

Office Exam Nat'l Quality Review Score The score awarded to a reviewed office examination case by a Quality Reviewer using the NQRS quality attributes.

Examination Quality – Large Business Average of the scores of the Large Business Return (LBR) cases reviewed by LB&I Quality Measurement System 

(LQMS). Case scores are based on the percentage of elements passed within each of the four auditing standard.

Examination Coverage – Business Assets >$10 

Million)

The number of LB&I returns (C and S Corporations with assets over $10 million and all partnerships) examined and 

closed by LB&I during the current fiscal year divided by the number of filings for the preceding calendar year.

Examination Efficiency – Individual (1040) The sum of all individual 1040 returns closed by SB/SE, W&I, TE/GE, and LB&I (Field Exam and Correspondence 

Exam programs) divided by the total Full-Time Equivalent (FTE) expended in relation to those individual returns.

Automated Underreporter (AUR) Efficiency The total number of W&I and SB/SE contact closures (a closure resulting from a case where we made contact) divided 

by the total FTE, including overtime.

Automated Underreporter (AUR) Coverage A percentage representing the total number of W&I and SB/SE contact closures (a closure resulting from a case where 

SBSE and W&I made contact) divided by the total return filings for the prior year.

Collection Coverage – Units The volume of collection work disposed compared to the volume of collection work available.

Collection Efficiency – Units The volume of collection work disposed divided by total collection FTE.

Field Collection Nat'l Quality Review Score The score awarded to a reviewed collection cases by a Quality Reviewer using the NQRS quality attributes.

Automated Collection System (ACS) Accuracy The percent of taxpayers who receive the correct answer to their ACS question.

Criminal Investigations Completed

The total number of subject criminal investigations completed during the fiscal year, including those that resulted in 

prosecution recommendations to the Department of Justice as well as those discontinued due to a lack of prosecution 

potential. 

Number of Convictions The number of criminal convictions.

Conviction Rate The percent of adjudicated criminal cases that result in convictions.

TE/GE Determination Case Closures The number of cases closed in the Employee Plans or Exempt Organizations Determination programs, regardless of 

type of case or type of closing.

Rentable Square Feet per Person The amount of Rentable Square Feet the IRS maintains per Personnel requiring space. IRS will use this as an indicator 

for FY 2017.

Percent of Major IT Investments within +/- 10% 

Cost Variance at the Investment Level 

Number of major IT investments within +/-10 percent variance between planned total cost and projected/actual cost 

within a fiscal year divided by the total number of major IT investments in that fiscal year.

Percent of Major IT Investments within +/- 10% 

Schedule Variance at the Investment Level 

Number of major IT investments within +/-10 percent variance between planned days and projected/actual days within a 

fiscal year divided by the total number of major IT investments in that fiscal year.
IRS-83 

3.4 – Summary of FY 2017 Savings Realized 

The IRS FY 2017 President’s Budget request of $11.405 billion was built on the FY 2016 

Enacted level of $11.235 billion and included $3.7 million and 72 FTE in reductions to the IRS 

FY 2016 base budget. However, the FY 2017 Enacted budget was $11.235 billion. 

Increase e-File Savings 

FY 2019 Projected Savings: (-$6,695,000 / -128 FTE) 

FY 2017 Actual Savings Realized: (-$2,169,600/ -48 FTE) 

The IRS realized savings of 48 FTE and $2.17 million in FY 2017 as a result of increases in 

electronically filed returns. The numbers of paper returns received by the IRS decreased by 

1 million from FY 2016 to FY 2017 while the number of electronically filed returns increased 

by 3.4 million over the same period. 

Rent

FY 2019 Annualized Savings: (-$9,703,414) 

Rent is one of the IRS's largest organizational operating expenses. The IRS will complete 

28 projects to release more than 567,986 rentable square feet of space from inventory for an 

annual rent savings of more than $9.7 million. 

 

Dollars in Millions

Internal Revenue Service

FY 2016 Enacted $11,235.0

Changes to Base:

Maintaining Current Levels (MCLs) $170.4

Pay Raise 100

Pay Annualization 27

Non-Pay Inflation Adjustment 43.4

FY 2017 Current Services $11,405.4

FY 2017 Enacted $11,235.0

Current Services Shortfall ($170.4)
IRS-84 

Section IV – Appendix 

4.1 – Appropriations Detail Table with Program Integrity Cap Adjustment 

1

FY 2017 Enacted reflects levels appropriated in H.R. 255, the Consolidated Appropriations Act of 2017. For further details on the execution of these 

resources, see the 2019 Budget Appendix chapter for the Department of the Treasury. Includes $220 million interappropriation transfer from 

Enforcement to Taxpayer Services ($90 million) and Operations Support ($130 million). FY 2017 Enacted also includes $290 million in Section 113 

Administrative Provision funding allocated in the following amounts: $209.2 million in Taxpayer Services and $80.8 million in Operations Support. FY 

2017 full-time equivalent (FTE) are actuals and reconcile to the final FY 2017 Obligations and Expenses report, which included the 36 FTE funded 

from prior year balances shown in the table above. Other Resources are actuals. Resources from Other Accounts include other direct FTE funded 

by the Federal Highway Administration. 

2

FY 2018 Annualized Continuing Resolution (CR) reflects a rescission of 0.6791 percent applied to the FY 2017 Enacted levels. FY 2018 Annualized 

CR also includes a notional $220 million interappropriation transfer from Enforcement to Operations Support to cover anticipated operations and 

maintenance requirements in FY 2018. The IRS will submit a formal transfer to request to Congress as part of the IRS FY 2018 Operating Plan upon 

enactment of a final appropriations bill. FY 2018 Annualized CR includes $288 million in Section 113 Administrative Provision funding in the following 

amounts: $208 million in Taxpayer Services and $80 million in Operations Support. FY 2018 Annualized CR does not include resources to implement 

new requirements under the Tax Cuts and Jobs Act (Public Law 115-97). 

Program Integrity Cap Adjustment 

In addition to the base appropriations request of $11.135 billion, the FY 2019 Budget proposes 

a $362 million cap adjustment to fund new and continuing investments in expanding and 

improving the effectiveness and efficiency of the IRS’s overall tax enforcement program. The 

proposed FY 2019 enforcement investments will yield additional revenue. The Budget also 

proposes additional cap adjustments for new investments each year through FY 2023 that are 

sustained with additional adjustments through FY 2028 to account for economic factors, such as 

inflation. The investments will generate about $44 billion in additional revenue over 10 years 

and will cost about $15 billion for an estimated net savings of $29 billion. Notably, the return 

on investment (ROI) likely is understated because it includes only amounts directly recovered; 

it does not reflect the effect that enhanced enforcement has on deterring non-compliance. 

Dollars in thousands

Internal Revenue Service

Appropriated Resources

FTE AM OUNT FTE AM OUNT FTE AM OUNT FTE AM OUNT FTE AM OUNT

N ew A ppro priated R eso urces:

T axpayer Services 28,692 $ 2,455,754 26,977 $ 2,349,688 24,668 $ 2,241,000 (2,309) ($ 108,688) -8.56% -4.63%

Pre-Filing Taxpayer Assistance and 

Education 4,700 607,043 4,451 603,424 4,460 607,753 9 4,329 0.20% 0.72%

Filing and Account Services 23,992 1,848,711 22,526 1,746,264 20,208 1,633,247 (2,318) (113,017) -10.29% -6.47%

Enfo rcement 36,550 $ 4,640,000 34,662 $ 4,606,996 36,157 $ 4,832,847 1,495 $ 225,851 4.31% 4.90%

Investigations 3,079 595,206 2,913 576,802 3,093 631,596 180 54,794 6.18% 9.50%

Exam and Collections 32,602 3,914,546 30,811 3,874,918 32,107 4,042,437 1,296 167,519 4.21% 4.32%

Regulatory 869 130,248 938 155,276 957 158,814 19 3,538 2.03% 2.28%

Operatio ns Suppo rt 10,835 $ 3,849,246 10,813 $ 3,913,988 11,155 $ 4,312,724 342 $ 398,736 3.16% 10.19%

Infrastructure 869,732 847,444 886,032 38,588 4.55%

Shared Services and Support 4,777 991,504 4,588 994,559 4,706 1,035,568 118 41,009 2.57% 4.12%

Information Services 6,058 1,988,010 6,225 2,071,985 6,449 2,391,124 224 319,139 3.60% 15.40%

B usiness Systems M o dernizatio n 557 $ 290,000 516 $ 288,031 516 $ 110,000 ($ 178,031) -61.81%

Subto tal N ew A ppro priated R eso urces 76,634 $ 11,235,000 72,968 $ 11,158,703 72,496 $ 11,496,571 (472) $ 337,868 -0.65% 3.03%

Other Resources:

Reimbursables 853 152,161 1,033 173,557 552 113,535 (481) (60,022) -46.56% -34.58%

Offsetting Collections - Non Reimbursables 16,407 16,407 17,227 820 5.00%

User Fees 161 241,485 75 499,100 71 498,900 (4) (200) -5.33% -0.04%

Recovery from Prior Years 2,497 18,351 17,549 (802) -4.37%

Unobligated Balances from Prior Years 36 297,310 827 351,715 341,709 (827) (10,006) -100.00% -2.84%

Transfers In/Out 17

Resources from Other Accounts 1 1 1

Subtotal Other Resources 1,051 $ 709,877 1,936 $ 1,059,130 624 $ 988,920 (1,312) ($ 70,210) -67.77% -6.63%

T o tal B udgetary R eso urces 77,685 $ 11,944,877 74,904 $ 12,217,833 73,120 $ 12,485,491 (1,784) $ 267,658 -2.38% 2.19%

% C hange

F Y 2018 to F Y 2019 

Request

Change

F Y 2017

Enacted 1

F Y 2018 to F Y 2019 

Request

F Y 2018

Annualized CR 2

F Y 2019

Request 3
IRS-85 

Return on Investment (ROI) for FY 2019 Enforcement Investments

Enforcement efforts increase revenue by encouraging voluntary compliance for taxpayers who 

would otherwise seek to avoid meeting their tax obligations under the law. The IRS calculates a 

return on investment for both revenue generating and revenue protecting investments. Revenue 

generated is from compliance efforts that yield direct, measurable results through enforcement 

activities such as examination and collection returns. Protected revenue is revenue the IRS 

protects from being refunded erroneously. It is associated with activities that occur before 

issuing a taxpayer’s refund, including the identification of fraud and questionable returns. 

FY 2019 Revenue Generating Investments 

The FY 2019 budget includes $290.1 million in investments for traditional enforcement and 

strategic revenue programs, which are projected to generate $2 billion in revenue once the 

investments reach full potential in FY 2021 with an expected total ROI of $5.2 to $1. This 

request includes $111.8 million to support strategic revenue producing investments, including 

improving identity assurance and strengthening the Return Review Program, among other 

initiatives. While the strategic revenue producing investments do not have an immediately 

measurable ROI, they have clear long-term positive revenue effects. 

FY 2019 Revenue Protecting Investments 

The benefits of IRS activities that prevent erroneous refunds are not captured in IRS’s ROI 

calculations above. However, the IRS estimates that investment in these activities should 

protect $1.1 billion in revenue that otherwise would have been recovered from downstream 

enforcement actions for an estimated ROI of $13.7 to $1 by FY 2021. These investments also 

Description FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 FY 2025 FY 2026 FY 2027 FY 2028

FY 2019 - 

FY 2028

Base $8,784 $8,874 $8,966 $9,058 $9,151 $9,246 $9,341 $9,437 $9,534 $9,632 $92,023

Cap $362 $749 $1,098 $1,450 $1,806 $1,893 $1,895 $1,904 $1,913 $1,922 $14,990

Total $9,146 $9,623 $10,064 $10,508 $10,957 $11,138 $11,236 $11,341 $11,447 $11,554 $107,013

Revenues $152 $787 $1,825 $3,033 $4,330 $5,554 $6,416 $6,931 $7,270 $7,505 $43,804

Net Savings ($209) $38 $727 $1,583 $2,525 $3,661 $4,521 $5,027 $5,358 $5,583 $28,814

IRS FY 2019 Program Integrity Cap Adjustment for Deficit Reduction

Return on Investment (ROI) for IRS FY 2019 Enforcement Initiatives 

Dollars in Millions

Cost Revenue ROI Cost Revenue ROI Cost Revenue ROI

FY 2019 Revenue Producing Enforcement Initiatives $290.1 $345.2 1.2 $389.5 $1,492.0 3.8 $382.8 $2,005.3 5.2

Before Cap Adjustment Enforcement Initiative $18.0 $0.0 0.0 $14.0 $0.0 0.0 $13.7 $0.0 0.0

Increase Audit Coverage 2.9 0.0 0.0 2.9 0.0 0.0 2.8 0.0 0.0

Increase Collection Coverage 1.7 0.0 0.0 2.0 0.0 0.0 1.9 0.0 0.0

Improve Identity Assurance 13.4 0.0 0.0 9.1 0.0 0.0 9.0 0.0 0.0

Cap Adjustment Enforcement Initiatives $290.1 $345.2 1.2 $389.5 $1,492.0 3.8 $382.8 $2,005.3 5.2

Immediate and Directly Measurable Revenue-Producing Initiatives $178.3 $345.2 1.9 $257.7 $1,492.0 5.8 $252.0 $2,005.3 8.0

Increase Collection Coverage 64.0 98.8 1.5 91.9 595.5 6.5 90.5 756.6 8.4

Increase Audit Coverage 114.3 246.4 2.2 165.8 896.5 5.4 161.5 1,248.7 7.7

Strategic Revenue-Producing Initiatives (which do not have immediately measurable ROI, but clear 

long-term revenue effects)

$111.8 $0.0 0.0 $131.8 $0.0 0.0 $130.8 $0.0 0.0

Improve Identity Assurance 29.6 0.0 0.0 33.5 0.0 0.0 33.6 0.0 0.0

Return Review Program 54.2 0.0 0.0 61.8 0.0 0.0 61.8 0.0 0.0

Tax Return Preparer Compliance and Professional Responsibility Activities 17.2 0.0 0.0 23.3 0.0 0.0 22.4 0.0 0.0

Expand CI for Cyber, Counterterrorism, and ID Theft Investigations 8.5 0.0 0.0 9.2 0.0 0.0 9.0 0.0 0.0

Prevent IDT & Refund Fraud and Reduce Improper Payments 2.3 0.0 0.0 4.0 0.0 0.0 4.0 0.0 0.0

First Year (FY 2019) Second Year (FY 2020) Full Performance (FY 2021)
IRS-86 

support IRS’s Agency Priority Goal on Fraud Prevention, which is part of the FY 2018-2022 

Treasury Strategic Plan to reduce the amount of unprotected identity theft tax refunds paid by 

two percent by December 21, 2019. 

FY 2019 Revenue-Protecting Enforcement Initiatives

Dollars in Millions

Cost Revenue ROI Cost Revenue ROI Cost Revenue ROI

Revenue Protecting Initiatives (which protect taxpayer information, prevents identity theft, and results in 

long-term revenue protection)

$71.6 $362.9 5.1 $82.8 $775.0 9.4 $80.8 $1,103.8 13.7

Cap Adjustment Revenue Protecting Initiative $71.6 $362.9 5.1 $82.8 $775.0 9.4 $80.8 $1,103.8 13.7

Increase Audit Coverage (revenue-protecting portion) 17.9 56.0 3.1 27.3 405.0 14.8 27.2 675.0 24.8

Prevent IDT & Refund Fraud and Reduce Improper Payments (revenue-protecting portion) 53.7 306.9 5.7 55.5 370.0 6.7 53.6 428.8 8.0

First Year (FY 2019) Second Year (FY 2020) Full Performance (FY 2021)
IRS-87 

Cap Adjustment Program Increases...............................+$361,571,000 / +1,691 FTE

Increase Audit Coverage +$132,201,000 / +940 FTE 

The IRS is requesting additional 

examination employees to increase 

staffing. The individual audit coverage 

rate has shrunk from 1.1 percent in FY 

2010 to an estimated target of 0.6 

percent in FY 2019, which increases 

the risk of undermining the integrity of 

the nation’s voluntary tax compliance 

system. Examination program 

resources will cover a broad range of 

compliance priorities and move 

towards achieving the goal of earlier 

case assignment and resolution. The 

investment is projected to produce 

more than $1.2 billion in additional 

revenue annually and an ROI estimated 

at 7.7 to 1, and protect revenue of $675 

million, a protected ROI of 24.8 to 1, 

once the new hires reach full potential 

in FY 2021. These resources will help 

to: 

 Close more than 41,000 

correspondence examination cases and 38,000 individual field examination cases; 

 Improve the individual audit coverage rate, and expand examination coverage on cases 

involving employment taxes, estate and gift taxes, and Bank Secrecy Act reporting; and 

 Expand the Automated Underreported (AUR) program to process more than 

470,000 additional cases and other document matching programs that will process an 

additional 133,000 cases (document matching of individuals decreased 36 percent from 

FY 2011 to FY 2017). 

 

P o sitio n T ype/ Other C o sts F T E $ 000

Examinat io n C o verag e 2 9 0 .50 $51,0 0 4

Revenue Agent 196.00 37,355

Tax Technician 78.00 12,402

M anager/Support Staff 16.50 1,247

Sp ecialt y Pro g rams 209.00 $26,603

Revenue Agent 34.50 7,373

Tax Technician 1.00 90

Tax Examiner 147.50 15,541

Attorney 3.50 691

Support Staff 22.50 2,908

C o rresp o nd ence Examinat io n 65.00 $6,084

Tax Technician 1.50 233

Tax Examiner 50.50 4,832

M anager/Support Staff 13.00 1,019

D o cument M at ching 16 1.0 0 $16 ,79 4

Tax Examiner 143.50 15,100

Support Staff 17.50 1,694

Ot her D irect Cost s 2 15.0 0 $3 1,716

Revenue Agent 25.00 4,057

Tax Examiner 18.00 1,953

Appeals Officer 40.00 6,816

Attorney 29.50 5,344

Paralegal 4.00 508

Contact Representative 330

TAS Specialist 96

HR Specialist 83.00 10,431

M anager/Program Analyst/Support Staff 15.50 1,911

Analyst - Seasonal 270

Total 9 4 0 .50 $13 2 ,2 0 1
IRS-88 

Increase Audit Coverage – Other Direct Costs (+$31.7 million / +215 FTE, included in total 

for Increase Audit Coverage above) 

IRS Activity Cost FTE Positions Explanation

Appeals $12,827 83.00 166

Support examination efforts on key compliance areas

focused on improving voluntary compliance and providing a

high level of customerservice.

Chief Counsel $6,692 41.50 83

Provide support for increases in requests for legal advice,

litigation assistance, and published guidance on issues raised

in audits.

Human Capital Office $10,430 83.00 83

LR support to handle the increase in front‐line positions and

the expectation that new managerial positions will be

created.  Employment bargaining unit positions require

internal and external postings that involve various

assessments and work processes.  Personnel Security FTE

handle background and suitability checks.

SB/SE Human 

Capital Office $762 4.00 8

Hiring positions support the onboarding of new hires.

Training positions focus on developing and updating course

material and delivering effective training.

Privacy, 

Governmental Liaison 

and Disclosure

$292 3.50 7 Address the increase in Freedom of Information Act requests

as result of increased compliance activity.

Taxpayer Advocate 

Service (TAS) $97 Ensure the IRS follows appropriate procedures and does not

create unnecessary burdens or compromise taxpayers' rights.

WAGE -- Customer 

Service 

Representatives

$618 

Support examination efforts by ensuring staffing is available

to handle downstream impact in accounts management

operations.

Total $31,716 215.00 347

Dollars in thousands

Major Activities Projected

Revenue ($M)

Projected 

Closures

F ield Examinatio n 228.9 32,272 

Specialty P ro grams 37.1 6,545 

C o rrespo ndence Examinatio n 216.0 41,860 

A UR 541.6 471,393 

B M F Underrepo rter/ D o cument M atching 225.1 133,785 

T o tal $ 1,248.7 685,855 
IRS-89 

Increase Collection Coverage +$63,932,000 / +433 FTE 

The IRS is requesting additional 

resources to improve its capacity to 

work the collection inventory and 

answer taxpayer phone calls about 

that inventory. Increased staffing will 

address the overall collection 

coverage rate, which has declined 16 

percent from FY 2010 to FY 2017. 

This investment is expected to 

produce additional annual 

enforcement revenue of 

$756.6 million, an ROI of $8.4 to $1, 

once the new hires reach full potential 

in FY 2021. These resources will 

help the IRS to: 

 Provide nearly 350 additional field collection staff to expand programs that address 

non-filing and underpayment of taxes and to handle more than 60,000 additional 

collection cases with an estimate of $43.4 billion in aggregate assessed balance; 

 Provide more than 220 additional 

Automated Collection System (ACS) 

staff to address additional 358,000 ACS 

cases, including incoming calls 

generated by the issuance of levies, 

delinquent returns, and/or unpaid tax 

liabilities. ACS staffing has decreased 

by 25 percent since the end of FY 2010, 

resulting in a substantial increase in 

unhandled ACS cases and a decreased 

level of service to taxpayers; and 

 Expand several Compliance Services 

Collection Operations (CSCO) programs 

that address non-filing and 

underpayment of taxes through the 

notice process by sending more than 350,000 notice dispositions and cases. CSCO 

investments will increase balance due work and expand the following programs: 

Automated Substitute for Return, Offers in Compromise, and Insolvency.

Major Activities Projected

Revenue ($M)

Projected 

Closures

Field Collection 330.6 63,470 

A uto mated C o llectio n System 405.6 358,658 

Offers In C o mpro mise 5.2 3,510 

C o mpliance Services C o llectio n Operatio n 15.2 65,919 

T o tal $ 756.6 491,557 

P o sitio n T ype/ Other C o sts F T E $ 000

Field Collection 172 .50 $3 0 ,9 2 9

Revenue Officer 172.50 30,929

A C S & A C S Support 113 .0 0 $12 ,16 1

Contact Representative 113.00 12,161

C orrespondence C ollect ion 32.00 $2,738

Tax Examiner 21.50 1,800

M anager/Support Staff 10.50 938

Ot her D irect C ost s 115.50 $18 ,10 4

Appeals Officer 52.00 8,861

Tax Examiner 9.00 977

TAS Specialist 193

Attorney 12.50 2,300

Paralegal 2.00 254

Support Staff 4.00 425

HR Specialist 18.00 2,260

HR Support Staff 18.00 2,593

Contact Representative 135

M anager/Support Staff 16

Seasonal 90

Total 433.00 $63,932
IRS-90 

Increase Collection Coverage - Other Direct Costs (+$18.1 million / +115.5 FTE) 

IRS Activity Cost FTE Positions Explanation

Appeals $9,837 61.00 122

Support collection efforts and provide a high level of

customerservice on key compliance areas, particularly the

Trust Fund Recovery Penalty and Collection Due Process

workstreams.

Chief Counsel $2,980 18.50 37 Provide support for increases in requests for legal advice,

litigation assistance, and collection due process.

Human Capital 

Office $3,900 31.00 31

LR support to handle the increase in front‐line positions and

the expectation that new managerial positions will be

created.  Employment bargaining unit positions require

internal and external postings that involve various

assessments and work processes.  Personnel Security FTE

handle background and suitability checks.

SB/SE Human 

Capital Office $952 5.00 10

Hiring positions support the onboarding of new hires. Training

positions focus on developing and updating course material

and delivering effective training.

Taxpayer Advocate 

Service (TAS) $193 Ensure the IRS follows appropriate procedures and does not

create unnecessary burdens or compromise taxpayers' rights.

WAGE -- Customer 

Service 

Representatives

$242 

Support collection efforts by ensuring staffing is available to

handle downstream impact in accounts management

operations.

Total $18,104 115.50 200

Dollars in thousands
IRS-91 

Prevent Identity Theft & Refund & Reduce Improper Payments +$56,017,000 / +140 FTE 

Resources from this investment provide the 

means to fulfill IRS agreements with state and 

industry partners, and to analyze and act on 

potentially millions of additional tax fraud 

leads in real time, thereby stopping millions of 

fraudulent refunds. New staff will conduct 

case reviews to validate potential areas of 

abuse and test procedures to prevent refund 

fraud. These resources will allow the IRS to 

protect revenue by identifying potentially false 

returns and verifying as-reported wage and 

withholding accuracy. This investment is 

expected to protect $428.8 million of revenue, 

a projected ROI of $8.0 to $1, once the new 

hires reach full potential in FY 2021. 

This investment provides staff ways to analyze more 

than 41 additional data points from returns filed by 

industry partners to enhance the determination of 

accurate indicators of identity theft. Additional 

leads also will be received and verified from 

financial institutions and state departments of 

revenue. The IRS will apply the new information to 

current year returns and future year filters/models. 

This investment will help to stop problems from 

becoming a source of criminal activity and lost 

revenue. In addition, the investment includes 

contractor support that will identify classes of fraud 

cases, defining how they vary across the fraud actor 

communities; facilitate sharing anonymized data for analysis and identification of fraud classes; 

monitor tax fraud communication on the deep web to increase awareness of criminal activity; 

examine the fraud lifecycle to identify steps that non-compliant taxpayers take and the ways the 

IRS can defend against each step; determine how to build effective prevention and defense early 

in the lifecycle; develop machine-ingestible common vocabulary for fraud intelligence that 

allows non-compliant characteristics and techniques to be efficiently shared; validate fraud 

prevention mechanisms to assess their effectiveness; and maintain and share current contact 

information with all partners. 

P o sitio n T ype/ Other C o sts F T E $ 000

Ident it y Thef t 4 3 .50 $2 4 ,6 19

Special Agent 32.00 13,510

Analyst/Support Staff 8.50 845

IT Specialist 3.00 316

Contractual Services 9,948

Securit y Summit 4 2 .50 $14 ,572

Special Agent 32.00 13,510

Analyst/Support Staff 7.50 746

IT Specialist 3.00 316

Pursue Emp lo yment T ax & Prevent 

A busive Tax Schemes 4 2 .0 0 $14 ,52 3

Special Agent 32.00 13,510

Analyst/Support Staff 7.00 697

IT Specialist 3.00 316

Ot her Direct Cost s 12 .0 0 $2 ,3 0 3

Attorney 9.50 2,060

Support Staff 2.50 243

Total 14 0 .0 0 $56 ,0 17
IRS-92 

Prevent Identity Theft & Refund & Reduce Improper Payments - Other Direct Costs (+$2.3 

million / +12 FTE) 

Improve Identity Assurance +$29,586,000/ +21 FTE 

This investment will increase security, 

usability, and analytics for identity 

assurance—the process of authenticating, 

authorizing, and accessing taxpayer-facing 

online services. As the Federal Government 

strives to deliver services online, it increases 

the need to safeguard electronic transactions 

involving such information. Both the 

electronic system and the user need assurance 

that the user’s identity can be confirmed: the 

system needs to know that the user is authorized to exchange the information, which in turn 

allows the user to have confidence that the system will not release sensitive information to 

unauthorized users. This confirmation of user identity is known as authentication. 

This investment will also include support for the e-Authentication Help Desk that will assist 

taxpayers with establishing or accessing their online accounts, and will enable the IRS to pursue 

new technologies for identity proofing and authentication and will decrease the time and effort 

required to resolve account issues. 

This investment will help taxpayers create a Secure Access account and shift them to less 

expensive online self-service channels. The new e-Authentication capabilities will enable more 

taxpayers to use IRS applications. The ongoing application and monitoring enhancements will 

improve security and the overall user experience. Funds will provide for transaction costs, 

design and development support and tool integration, expansion of additional use cases and 

business reengineering, and developing prototypes for key tax pro account features. 

IRS Activity Cost FTE Positions Explanation

Chief Counsel $2,303 12.00 24 Provide support for increases in requests for legal advice,

litigation assistance, and collection due process.

Total $2,303 12.00 24

Dollars in thousands

P o sitio n T ype/ Other C o sts F T E $ 000

Taxpayer A ut hent icat ion A ssist ance $1,3 4 3

M anager/Analyst/Support Staff 501

M anager - Seasonal 56

Analyst - Seasonal 786

E- Aut hent icat ion 2 1.0 0 $4 ,2 4 3

Program Analyst 312

IT Specialist 21.00 3,931

R ef orm Plan $24,000

Hardware & Software 3,360

Contractual Services 20,640

Total 2 1.0 0 $2 9 ,58 6
IRS-93 

Tax Return Preparer Compliance and Program Responsibility +$17,152,000 / +75 FTE 

This investment will seek to ensure that tax preparers meet uniformly high ethical standards of 

conduct by enforcing preparer compliance 

with applicable IRS rules, increasing 

preparer examinations, and monitoring 

and pursuing preparers engaged in 

fraudulent activities, including 

noncompliant Earned Income Tax Credit 

(EITC) return preparers. This investment 

also provides resources for the IRS’s 

Office of Professional Responsibility 

(OPR) to conduct oversight of return 

preparers who represent taxpayers and 

who are subject to Circular 230, 

Regulations Governing Practice Before 

the Internal Revenue Service (C230). This 

investment is critical to the IRS’s strategy 

to reduce the tax gap and will improve the 

IRS’s ability to deliver high-priority, 

preparer-related enforcement activities. 

Key activities and deliverables of this 

investment include deploying a coordinated return compliance strategy by: 

 Developing techniques to detect return preparer errors; 

 Coordinating return preparer activities across IRS enforcement functions; 

 Prioritizing activities through a return preparer enforcement work plan; 

 Updating detection tools and selection logic; and 

 Determining effective measurement strategies. 

P o sitio n T ype/ Other C o sts F T E $ 000

Enf orce Tax Ret urn Preparer 

C o mp liance 39.50 $6,825

Revenue Agent 30.00 5,694

Revenue Officer 1.00 179

Attorney 0.50 74

Tax Examiner 3.00 287

Tax Technician 2.00 318

Analyst/Support Staff 3.00 273

Pursue Tax R et urn Preparer Fraudulent 

Activity 17.0 0 $6 ,76 4

Special Agent 12.00 5,067

Analyst/Support Staff 5.00 497

Contractual Services 1,200

Tax Debt Resolut ion 1.0 0 $16 8

Attorney 0.50 103

Paralegal 0.50 65

Ensure Et hnical St andards of Conduct 

Pract it ioners 17.50 $3 ,0 9 6

Attorney 5.00 1,030

Paralegal 2.50 325

Support Staff 10.00 1,741

T echno lo g y Enhancement s 0.00 $299

Contractual Services 299

Total 75.0 0 $17,152

Major Activities Preparer 

V isits

Invest igat ions 

C omplet ed

Enf orce Tax R et urn Prep arer C o mp liance 2,000

Pursue Tax R et urn Preparer Fradulent A ct ivit y 31

Total 2,000 31
IRS-94 

Tax Return Preparer Compliance and Program Responsibility – Enforce Tax Return Preparer 

Compliance (+$6.8 million / +39.50 FTE) 

Given the important role that tax return preparers play in tax administration, the IRS has a 

significant interest in identifying tax return preparers and monitoring their tax return preparation 

activities. These funds will allow the IRS to manage a coordinated return preparer compliance 

strategy by conducting on-site visits and investigating suspicious activity, especially of abusive 

return preparers. 

The IRS identifies preparer cases through programs and referrals from field staff, taxpayers, and 

Criminal Investigation (CI). Revenue agents and special agents conduct preparer audits and 

visits. Specific planned program activities include field visits by revenue agents and CI special 

agents to return preparers with compliance-related concerns and dedicated reviews of the 

returns of the clients of those preparers to determine whether those clients owe additional taxes 

and whether it is appropriate to assess penalties. 

The Administration is also proposing enhanced authority to oversee paid preparers.

Tax Return Preparer Compliance and Program Responsibility – Pursue Tax Return Preparer 

Fraudulent Activity (+$6.8 million / +17 FTE)

These funds provide resources for CI to form multi-agency taskforces dedicated to preventing 

fraudulently obtained refunds from financing and supporting criminal activity. Special agents 

will conduct outreach efforts with the practitioner community to educate them on their legal 

responsibilities and will develop leads on unscrupulous return preparers. CI will work with 

state taxing agencies to leverage resources and seek prosecution at both the federal and state 

levels as appropriate. These teams will target larger-scale criminal rings for maximum 

compliance results and publicity. 

Tax Return Preparer Compliance and Program Responsibility – Tax Debt Resolution (+$0.2 

million / +1 FTE)

These funds provide resources to fund one attorney and paralegal to address the deceptive and 

misleading practices suspected in the tax debt resolution industry. 

Tax Return Preparer Compliance and Program Responsibility – Ensure Ethical Standards of 

Conduct for Practitioners (+$3.1 million / +17.50 FTE)

The population of those subject to the ethical standards contained in C230 is expanding to 

include unlicensed tax return preparers who represent taxpayers in disputes involving returns 

and claims for refund that they prepared or signed, and others who represent taxpayers in tax 

collection matters. The nature of the cases being handled by OPR has evolved over the past five 

years from a focus on a practitioner’s own tax non-compliance to a focus on complex 

practitioner conduct that violates substantive provisions in C230 involving due diligence, false 

and misleading information given to IRS personnel, conflicts of interest, advising conduct in 

violation of tax laws, and false and misleading advertising. 
IRS-95 

These complex conduct cases, by their nature, require more extensive development, involve 

more sophisticated settlement negotiations and are more apt to result in commencement of an 

administrative proceeding before an Administrative Law Judge. We also have observed that, in 

the wake of the recent Loving v. Commissioner decisions, the tax community has become more 

likely to push proceedings into litigation rather than to settlement. 

OPR estimates that the number of cases requiring litigation could triple over the next two years 

in line with OPR’s expanded jurisdiction. The additional staffing will handle these complex 

conduct cases and the associated appeals, conferences, allegations, negotiations, and 

administrative hearing preparation, briefing and, when necessary, appeals of Administrative 

Law Judge decisions. 

In addition, the increased staffing will handle: 

 Anticipated increases in referrals of practitioner misconduct; 

 Due process conferences; 

 The new Appellate Authority functions delegated to OPR with respect to appeals from 

Return Preparer Office (RPO) determinations by C230 practitioners regarding 

compliance and suitability in the Preparer Tax Identification Number (PTIN) registration 

process; and 

 Alleged violations of C230 standards by tax debt resolution companies that assist 

taxpayers with negotiations to abate penalties, enter into installment agreements, and 

compromise an assessed federal tax liability. 

Tax Return Preparer Compliance and Program Responsibility – Technology Expansion (+$0.3 

million / 0 FTE)

 E-TRAK Case and Correspondence Management System (CCMS) is the application 

utilized by OPR to input referrals, manage resulting cases, and produce management 

information reports. Currently, OPR’s interactions with the IRS Return Preparer Office 

(RPO) and Centralized Authorization File (CAF) unit rely on a manual process. 

Interfacing CCMS with the 360 database will allow OPR research capability and the 

ability to exchange referrals and other pertinent information electronically, to include the 

revocation of PTINs and resulting CAF notifications. 

Tax Return Preparer Compliance and Program Responsibility – Video Conference Capability 

To reduce travel costs and enhance the ability to provide due process remotely, OPR is seeking 

resources for a video conferencing capability to conduct mandatory disciplinary conferences. 
IRS-96 

Expand Cyber and Counterterrorism Investigative Activities +$8,500,000 / +25 FTE 

Funding for this investment will strengthen 

cybercrimes and counterterrorism by 

enhancing several areas, including: 

 Supplementing Special Agent and 

Investigative Support resources to 

combat cyber-criminals that exploit 

stolen taxpayer Personally Identifiable Information (PII) obtained through sophisticated 

data breaches and intrusions. 

 Allowing for increased participation in multi-agency cyber and counterterrorism 

taskforces to target large-scale crime rings to maximize compliance. 

 Expanding criminal investigations through analysis of rich data from Suspicious 

Activity Reports (SARs). 

 Funding the build-out of CI’s cybersecurity and cybercrime divisions. 

 Identifying geographically driven issues.

This request funds contractor support that will: 

 Identify classes of fraud use cases, defining how they vary across the fraud actor 

community; 

 Facilitate sharing anonymized data for analysis and identification of fraud classes; 

monitor tax fraud communication on the deep web to increase awareness of criminal 

activity focused on undermining protection barriers and fraud filters; 

 Examine the fraud lifecycle to identify steps that non-compliant taxpayers take and the 

ways CI can defend against each step; 

 Determine how to build effective prevention and defense early in the fraud lifecycle; 

 Develop machine ingestible common vocabulary for fraud intelligence that allows noncompliant characteristics and techniques to be shared efficiently in a timely way; 

 Validate fraud prevention mechanisms to assess their effectiveness; and 

 Maintain and share current contact information with all partners. 

 

P o sitio n T ype/ Other C o sts F T E $ 000

Exp and C yber and C o unt ert erro rism 

Invest igat ive A ct ivit ies 25.00 $8,500

Special Agent 12.00 5,066

Analyst 11.00 1,094

IT Specialist 2.00 343

Contractual Services 1,997

Total 25.00 $8,500
IRS-97 

Return Review Program +$54,183,000 / +57 FTE

This investment provides funding for 57 FTE, 

hardware, software, and contractual services for 

deployed Return Review applications. RRP 

deployed an Integrated Data Warehouse, In-Line 

Screening engine, and Offline Prevention 

environment that enhanced the IRS's ability to detect, resolve, and prevent criminal fraud and 

civil tax non-compliance. Since October 2016, the RRP has been the IRS’s primary system for 

detecting tax return fraud and other anomalies in tax filings, with the current focus being on 

individual tax return data. Since the start of Filing Season 2015, the RRP has protected over 

$6.51 billion of revenue in confirmed fraud, with a return on investment of more than 1,500 

percent. 

Funding will allow the IRS to provide support for the deployed capabilities by: 

 Enhancing applications, data modeling and mining, database development, business 

rules development, infrastructure support, performance engineering and testing, and 

application testing; 

 Supporting annual hardware maintenance fees and purchases to refresh computers, 

network equipment, and storage; 

 Updating and maintaining the system software, including operating systems, database, 

data integration, and utility software; and 

 Updating rules engines and data analytics. 

 

P o sitio n T ype/ Other C o sts F T E $ 000

R et urn R eview Pro g ram 

Operat ions and M aint enance 57.0 0 $54 ,18 3

IT Specialist 57.00 10,331

Software & Hardware 13,671

Contractual Services 30,181

Total 57.0 0 $54 ,18 3
IRS-98 

4.2 – Summary of IRS FY 2019 Identity Theft Budget Request 

4.3 – Summary of IRS FY 2019 ACA Budget Request 

Bureau: Internal Revenue Service 

Summary of FY 2019 Identity Theft Request $000 FTE $000 FTE $000 FTE $000 FTE $000 FTE

FY 2018 Annualized CR Level1 $185,580 2,696 $282,779 2,694 $58,848 44 $15,689 $542,896 5,434

Changes to Base:

Maintaining Current Levels (MCLs) $4,593 $6,999 $1,456 $13,048

Pay Annualization 882 1,343 280 2,504

Non-Pay Inflation Adjustment 3,712 5,656 1,177 10,544

Subtotal FY 2019 Changes to Base $4,593 $6,999 $1,456 $13,048

FY 2019 Current Services $190,173 2,696 $289,778 2,694 $60,304 44 $15,689 $555,944 5,434

Program Changes:

Before Cap Adjustment Program Increases

Stabilize, Secure and Transform IT Operations 24,300 21 24,300 21

Identity Assurance - e-Authentication Enhancements and Authorization Integration 24,300 21 24,300 21

Support Taxpayer Services and Online Account Activities 5,449 60 5,449 60

Subtotal FY 2019 Program Increases Before Cap Adjustment $5,449 60 $24,300 21 $29,749 81

FY 2019 Request Before Cap Adjustment $195,622 2,756 $289,778 2,694 $84,604 65 $15,689 $585,693 5,515

Cap Adjustment Program Increases

Prevent Identity Theft & Refund Fraud & Reduce Improper Pymts 47,495 140 8,522 56,017 140

Return Review Program 54,183 57 54,183 57

Subtotal FY 2019 Cap Adjustment Investments $47,495 140 $62,705 57 $110,200 197

Total FY 2019 Request Including Cap Adjustment $195,622 2,756 $337,273 2,834 $147,309 122 $15,689 $695,893 5,712 1

The FY 2018 Annualized CR level includes a proposed Interappropriation Transfer in the amount of $220M from Enforcement to the Operations Support appropriation account

Dollar/FTE Change FY 2019 Request over FY 2018 Annualized CR $10,042 60 $54,494 140 $88,461 78 $152,997 278

Percent Change FY 2019 Request over FY 2018 Annualized CR 5.41% 2.23% 19.27% 5.20% 150.32% 177.27% 28.18% 5.12%

TAXPAYER 

SERVICES ENFORCEMENT OPERATIONS 

SUPPORT BSM TOTAL

Bureau: Internal Revenue Service 

Summary of FY 2019 ACA Request $000 FTE $000 FTE $000 FTE $000 FTE

FY 2018 Annualized CR Level $106,823 1,695 $21,537 186 $54,547 313 $182,907 2,194

Changes to Base:

Maintaining Current Levels (MCLs) $510 $106 $334 $950

Pay Annualization 509 103 249 861

Non-Pay Inflation Adjustment 1 3 85 89

Subtotal FY 2019 Changes to Base $510 $106 $334 $950

FY 2019 Current Services $107,333 1,695 $21,643 186 $54,881 313 $183,857 2,194

Total FY 2019 Request $107,333 1,695 $21,643 186 $54,881 313 $183,857 2,194 1

 FY 2018 Annualized CR Level excludes $147 million in User Fees. The total with User Fees would be $330 million.

Dollar/FTE Change FY 2019 Request over FY 2018 Annualized CR $510 $106 $334 $950

Percent Change FY 2019 Request over FY 2018 Annualized CR 0.48% 0.49% 0.61% 0.52%

TAXPAYER 

SERVICES

ENFORCEMENT OPERATIONS 

SUPPORT 1 TOTAL
IRS-99 

4.4 – Summary of IRS FY 2019 Cyber Security Budget Request 

Bureau: Internal Revenue Service 

Summary of FY 2019 Cyber Security Request $000 FTE $000 FTE $000 FTE $000 FTE

FY 2018 Annualized CR Level $10,978 12 $10,837 58 $227,756 444 $249,571 514

Changes to Base:

Maintaining Current Levels (MCLs) $272 $268 $5,637 $6,177

Pay Annualization 52 51 1,082 1,185

Non-Pay Inflation Adjustment 220 217 4,555 4,991

Subtotal FY 2019 Changes to Base $272 $268 $5,637 $6,177

FY 2019 Current Services $11,250 12 $11,105 58 $233,393 444 $255,748 514

Program Changes:

Before Cap Adjustment Program Increases

Stabilize, Secure and Transform IT Operations 40,000 10 40,000 10

Strengthen Cyber Security 40,000 10 40,000 10

Support Taxpayer Services and Online Account Activities 7,953 7,953

Subtotal FY 2019 Program Increases Before Cap Adjustment $7,953 $40,000 10 $47,953 10

FY 2019 Request Before Cap Adjustment $19,203 12 $11,105 58 $273,393 454 $303,701 524

Cap Adjustment Program Increases

Subtotal FY 2019 Cap Adjustment Investments

Total FY 2019 Request Including Cap Adjustment $19,203 12 $11,105 58 $273,393 454 $303,701 524

1 FY 2018 Annualized CR Level in the amount of $249,571 million excludes $38.8 million in User Fees. The total including User Fees would be $288,371 million.

Dollar/FTE Change FY 2019 Request over FY 2018 Annualized CR $8,225 $268 $45,637 10 $54,130 10

Percent Change FY 2019 Request over FY 2018 Annualized CR 74.92% 2.47% 20.04% 2.25% 21.69% 1.95%

TAXPAYER 

SERVICES

ENFORCEMENT

OPERATIONS 

SUPPORT 1 TOTAL
IRS-100 

4.5 – Summary of IRS FY 2019 Request 

Bureau: Internal Revenue Service 

Summary of FY 2019 CJ Request $000 FTE $000 FTE $000 FTE $000 FTE $000 FTE

FY 2018 Annualized CR Level1 $2,349,688 26,977 $4,606,996 34,662 $3,913,988 10,813 $288,031 516 $11,158,703 72,968

Changes to Base:

Maintaining Current Levels (MCLs) $13,115 $26,598 $53,808 $172 $93,693

Pay Annualization 9,697 21,035 7,823 172 38,727

Non-Pay Inflation Adjustment 3,418 5,563 45,985 54,966

Efficiency/Savings ($6,695) (128) ($6,103) ($12,798) (128)

Increase e-File Savings (6,695) (128) (102) (6,797) (128)

Space Optimization (6,001) (6,001)

Reinvestment 12,798 12,798

Support Aging IT Infrastructure 12,798 12,798

Subtotal FY 2019 Changes to Base $6,420 (128) $26,598 $60,503 $172 $93,693 (128)

FY 2019 Current Services $2,356,108 26,849 $4,633,594 34,662 $3,974,491 10,813 $288,203 516 $11,252,396 72,840

Program Changes:

Program Decreases

Actions to Achieve Workforce Management Goals ($133,134) (2,307) ($5,390) ($138,524) (2,307)

Realignment from BSM to Operations Support ($178,203) ($178,203)

Subtotal FY 2019 Program Decreases ($133,134) (2,307) ($5,390) ($178,203) ($316,727) (2,307)

Before Cap Adjustment Program Increases

Stabilize, Secure and Transform IT Operations 181,305 146 181,305 146

Strengthen Cyber Security 40,000 10 40,000 10

Identity Assurance - e-Authentication Enhancements and Authorization Integration 24,300 21 24,300 21

Aging Technology Infrastructure 39,000 39,000

Migration to Cloud Services 20,000 20,000

Stabilize IT Operations 58,005 115 58,005 115

Support Taxpayer Services and Online Account Activities 18,026 126 18,026 126

Subtotal FY 2019 Program Increases Before Cap Adjustment $18,026 126 $181,305 146 $199,331 272

FY 2019 Request Before Cap Adjustment $2,241,000 24,668 $4,628,204 34,662 $4,155,796 10,959 $110,000 516 $11,135,000 70,805

Cap Adjustment Program Increases

Increase Audit Coverage 91,240 854 40,961 86 132,201 940

Increase Collection Coverage 45,338 402 18,594 31 63,932 433

Prevent Identity Theft & Refund Fraud & Reduce Improper Pymts 47,495 140 8,522 56,017 140

Improve Identity Assurance 29,586 21 29,586 21

Tax Return Preparer Compliance and Pro. Responsibility Activities 12,999 75 4,153 17,152 75

Expand CI for Cyber and Counterterrorism Investigations 7,571 25 929 8,500 25

Return Review Program 54,183 57 54,183 57

Subtotal FY 2019 Cap Adjustment Investments $204,643 1,496 $156,928 195 $361,571 1,691

Total FY 2019 Request Including Cap Adjustment $2,241,000 24,668 $4,832,847 36,158 $4,312,724 11,154 $110,000 516 $11,496,571 72,496

1See footnotes in 1.1 – Appropriations Detail Table

TAXPAYER SERVICES ENFORCEMENT OPERATIONS SUPPORT BSM TOTAL