Department of the Treasury – Budget in Brief 

Internal Revenue Service

Program Summary by Budget Activity 

Dollars in thousands 

 FY 2017 FY 2018 FY 2019 FY 2018 TO FY 2019 

Budget Activity Enacted1 Annualized 

CR2 Request3 $ Change % Change 

Taxpayer Services $2,455,754 $2,349,688 $2,241,000 ($108,688) -4.63% 

Pre-filing Taxpayer Assistance and Education 607,043 603,424 607,753 4,329 0.72% 

Filing and Account Services 1,848,711 1,746,264 1,633,247 (113,017) -6.47% 

Enforcement $4,640,000 $4,606,996 $4,628,204 $21,208 0.46% 

Investigations 595,206 576,802 578,949 2,147 0.37% 

Exam and Collections 3,914,546 3,874,918 3,893,373 18,455 0.48% 

Regulatory 130,248 155,276 155,882 606 0.39% 

Operations Support $3,849,246 $3,913,988 $4,155,796 $241,808 6.18% 

Infrastructure 869,732 847,444 860,058 12,614 1.49% 

Shared Services and Support 991,504 994,559 1,005,911 11,352 1.14% 

Information Services 1,988,010 2,071,985 2,289,827 217,842 10.51% 

Business Systems Modernization $290,000 $288,031 $110,000 ($178,031) -61.81% 

Subtotal, Internal Revenue Service $11,235,000 $11,158,703 $11,135,000 ($23,703) -0.21% 

Reimbursables 152,161 173,557 113,535 (60,022) -34.58% 

Offsetting Collections - Non Reimbursables 16,407 16,407 17,227 820 5.00% 

User Fees 241,485 499,100 498,900 (200) -0.04% 

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

Unobligated Balances from Prior Years 297,310 351,715 353,222 1,507 0.43% 

Transfers In/Out 17 

Total Program Operating Level $11,944,877 $12,217,833 $12,136,215 ($81,618) -0.67% 

Direct FTE 76,634 72,968 70,805 (2,163) -2.96% 

Reimbursable FTE 853 1,033 552 (481) -46.56% 

Offsetting Collections - Non Reimbursables 

User Fee FTE 161 75 71 (4) -5.33% 

Unobligated Balances from Prior Years 36 827 (827) -100.00% 

Resources from Other Accounts 1 1 1 

Total FTE 77,685 74,904 71,429 (3,475) -4.64% 

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 of the IRS FY 2019 Congressional Justification.
Department of the Treasury – Budget in Brief 

Summary 

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. 

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 everincreasing cyber threats. 

The Department of the Treasury’s strategic 

plan for FY 2018 – 2022 and the forthcoming 

IRS Strategic Plan 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. 

In FY 2017, the IRS delivered a successful 

filing season that opened on January 23, 2017. 

During the 2017 filing season, the IRS: 

 Received about 136 million individual tax 

returns and issued 97 million refunds 

totaling $268 billion with an average 

individual refund of $2,862. More than 

90 percent of these individual returns 

received were filed electronically; 

 Filing season LOS, the relative success 

rate of taxpayers that call the toll-free 

number seeking assistance from a 

customer service representative, reached 

79.1 percent, its highest level since 2007; 

 Received almost 30.9 million business 

returns, 3.3 percent more than in 2016 of 

which almost 19.3 million were filed 

electronically, an increase of almost 

10 percent from 2016; and 

 In calendar year 2017, using new screening 

criteria, the IRS stopped $5.2 billion in 

fraudulent refunds claimed by identity 

thieves on 567,000 tax returns from 

January 2017 through October 2017. 

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. With hundreds 

of provisions intended to provide relief to 

American families and make America’s 

businesses more competitive, the new law will 

require extensive administrative work in 

calendar years 2018 and 2019. To ensure 

successful implementation, the IRS will need 

immediate additional resources to address the 

following requirements: 

 Create new and revised taxpayer forms, 

instructions, and publications; 

 Provide technical support to taxpayers on 

issues involving interpretations of the law 
Department of the Treasury – Budget in Brief 

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; and 

 Reprogram approximately 140 interrelated 

information technology systems, with 

special focus on return processing and 

compliance systems. 

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. 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. 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. 

IRS FY 2019 Budget Highlights 

Bureau: Internal Revenue Service 

Summary of FY 2019 CJ Request $000 FTE $000 FTE $000 FTE $000 FTE $000 FTE

FY 2018 Annualized CR Level $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)

Program Increases (Before Cap Adjustment)

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 $18,026 126 $181,305 146 $199,331 272

Total 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

See footnotes in 1.1 – Appropriations Detail Table

TAXPAYER 

SERVICES ENFORCEMENT OPERATIONS SUPPORT BSM TOTAL
Department of the Treasury – Budget in Brief 

FY 2019 Budget Adjustments 

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. 

Adjustments to Request 

Maintaining Current Levels (MCLs) 

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 contracts, rent, supplies, and 

equipment. 

Efficiencies and Savings 

Increase e-File Savings -$6,797,000 

/ -128 FTE 

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 128 FTE and 

$6,797,000. 

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

The IRS will reduce rent expenses and 

improve use 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. 

Reinvestment 

Support 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 replacement 

standards. The IRS requires about 

$136 million to replace assets that have aged 

in the past fiscal year, and estimates every 

$10 million spent above the $136 million 

threshold will result in a one percent reduction 

of the aged assets. Thus, $12.8 million should 

allow for replacement of about 1.3 percent of 

aged assets. 

Program Changes 

Program Increases 

Secure and Transform IT Operations 

+$181,305,000 / +146 FTE 

The IRS will protect sensitive data by 

executing a multi-year plan to enhance cyber 

security, pursue new technologies for identity 

proofing and authentication, decrease the time 

and effort required to resolve account issues, 

refresh and replace critical IT infrastructure, 

migrate to cloud computing service delivery 

models, and focus on developing innovative 

technology solutions. 

Support Taxpayer Services and Online 

Account Activities +$18,026,000 / +126 FTE 

The additional customer service 

representatives will handle downstream effect 

on collection, account management, and 

submission processing operations. The 

additional Taxpayer Advocate Services (TAS) 

specialists will ensure that the IRS does not 

create unnecessary burdens or compromise 

taxpayers’ 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 also will include 

support for the e-Authentication Help Desk to 
Department of the Treasury – Budget in Brief 

assist taxpayers establish or access their online 

accounts. 

Program Decreases 

Actions 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. 

 

Explanation of Budget Activities 

Taxpayer Services 

The FY 2019 President’s Budget request is 

$2,241,000,000 in direct appropriations. This 

appropriation funds the following budget 

activities: 

Pre-filing Taxpayer Assistance & 

Education ($607,753,000 from direct 

appropriations, an estimated $1,237,000 

from reimbursable resources, and an 

estimated $5,000,000 from unobligated 

balances from prior years) 

This budget activity funds services to help 

taxpayers understand and meet their tax 

obligations, including tax law interpretation, 

publication, production, and advocate services. 

Filing & Account Services (1,633,247,000 

from direct appropriations, an estimated 

$35,519,000 from reimbursable resources, 

and an estimated $67,900,000 from user 

fees) 

This budget activity funds programs that 

provide filing and account services to 

taxpayers, process paper and electronically 

submitted tax returns, issue refunds, and 

maintain taxpayer accounts. 

 

Enforcement 

The FY 2019 President’s Budget request is 

$4,628,204,000 in direct appropriations. This 

appropriation funds the following budget 

activities: 

Investigations ($578,949,000 from direct 

appropriations, an estimated $32,769,000 

from reimbursable resources, an estimated 

$17,227,000 from offsetting collections – 

non-reimbursables, an estimated 

$2,964,000 from recoveries paid, and an 

estimated $13,378,000 from unobligated 

balances from prior years) 

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 when 

warranted. These programs identify and 

document the movement of legal and illegal 

sources of income and instances of suspected 

intent to defraud. This budget activity also 

provides resources for international 

investigations involving U.S. citizens residing 

abroad, non-resident aliens, and expatriates, 
Department of the Treasury – Budget in Brief 

and includes investigation and prosecution of 

tax and money laundering violations 

associated with narcotics organizations. 

Exam & Collections ($3,893,373,000 from 

direct appropriations, an estimated 

$986,000 from reimbursable resources, 

and $17,229,000 from unobligated 

balances from prior years) 

This budget activity funds programs that 

enforce the tax laws, increase compliance 

through examination and collection, and 

ensure proper payment and tax reporting. It 

also includes campus support of the 

Questionable Refund program and appeals and 

litigation activities associated with exam and 

collection. 

Regulatory ($155,882,000 from direct 

appropriations, an estimated $177,000 from 

reimbursable resources)

This budget activity funds the development 

and printing of published IRS guidance 

materials including the interpretation of tax 

laws, internal advice to the IRS on general 

non-tax legal issues, enforcement of regulatory 

rules, laws, and approved business practices, 

and support of taxpayers in the areas of 

pre-filing agreements, determination letters, 

and advance pricing agreements. The Return 

Preparer Program is funded within this 

activity, as is the Office of Professional 

Responsibility, which identifies, 

communicates, and enforces Treasury 

Circular 230 standards of competence, 

integrity, and conduct of professionals 

representing taxpayers before the IRS. 

Operations Support 

The FY 2019 President’s Budget request is 

$4,155,796,000 in direct appropriations. This 

appropriation funds the following budget 

activities: 

Infrastructure ($860,058,000 from direct 

appropriations, an estimated $711,000 from 

reimbursable resources, an estimated 

$779,000 from recoveries, and an 

estimated $18,191,000 from unobligated 

balances from prior years) 

This budget activity funds administrative 

services such as space and housing, rent and 

space alterations, building services, 

maintenance, guard services, and non-IT 

equipment. 

Shared Services & Support ($1,005,911,000 

from direct appropriations, an estimated 

$21,399,000 from reimbursable resources, 

an estimated $1,000,000 from user fees, an 

estimated $4,000 from recoveries, and an 

estimated $16,004,000 from unobligated 

balances from prior years) 

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. 

Information Services ($2,289,827,000 from 

direct appropriations, an estimated 

$20,737,000 from reimbursable resources, 

an estimated $396,000,000 from user fees, 

an estimated $10,264,000 from recoveries, 

an estimated $466,000 from recoveries 

paid, and an estimated $46,501,000 from 

unobligated balances from prior years) 

This budget activity funds staffing, equipment, 

and related costs to manage, maintain, and 

operate the information systems critical to the 

support of tax administration programs. This 

includes the design and operation of 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. 
Department of the Treasury – Budget in Brief 

Business Systems Modernization 

The FY 2019 President’s Budget request is 

$110,000,000 in direct appropriations. This 

appropriation funds the following budget 

activity: 

Business Systems Modernization 

($110,000,000 in direct appropriations, this 

is a decrease of $178,031,000, or 

61.8 percent less than the FY 2018 

Annualized Continuing Resolution level of 

$288,031,000 and 516 FTE) 

This budget activity funds the planning and 

capital asset acquisition of IT to modernize 

IRS business systems, including labor and 

related contractual costs. It funds’ investments 

in systems that enhance the IRS’s capability to 

detect, resolve, and prevent tax refund fraud 

and protect U.S. Treasury revenue, simplify 

the taxpayer’s online experience, provide 

secure digital communications, and add more 

interactive capabilities to existing web 

self-service products. 

Legislative Proposals 

The FY 2019 President’s Budget request 

includes four 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.

Streamlined Critical Pay (SCP): Streamlined 

Critical Pay authority through 

September 30, 2022. The authority to make 

new SCP appointments expired 

September 30, 2013. Currently, there are no 

Streamlined Critical Pay appointees employed 

by the IRS. If the SCP is not renewed, the IRS 

will continue to face challenges recruiting 

top-level talent, especially IT professionals 

who help protect taxpayer data from cyber-

 attacks and who assist with modernizing the 

IRS's IT infrastructure. According to Treasury 

Inspector General for Tax Administration 

report 2015-IE-R001, The Internal Revenue 

Service’s Use of Its Streamlined Critical Pay 

Authority, “Private sector expertise had been 

crucial to introducing new leadership to 

supplement in-house expertise, and the IRS 

had taken advantage of the private sector 

expertise by retaining the critical pay 

appointees whenever feasible.” The IG 

concluded in its report that the IRS ran the 

program well and effectively. 

Correctable Error Authority: When the IRS 

identifies certain mathematical or 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 math error 

authority on a case-by-case basis. The IRS 

would be able to improve tax administration 

significantly, including 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. 

 

Increase Oversight of Paid Tax Return 

Preparers: Since 2011, the D.C. District 

Court (and the D.C. Circuit Court affirming on 

appeal) has prevented the IRS 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 Treasury 

Department. The Administration continues to 

hold that improved regulation of preparers is 
Department of the Treasury – Budget in Brief 

an effective means to improve voluntary 

compliance. Thus, the Administration 

requests that the IRS be granted the authority 

to require minimum standards for all 400,000 

tax preparers without credentials.

IRS Performance Highlights 

FY 2015 FY 2016 FY 2017 FY 2017 FY 2018 FY 2019 

Budget Activity Performance Measures Actual Actual Actual Target Target Target 

Filing and Account 

Services 

Customer Service 

Representative Level of 

Service (LOS) 

38.1% 53.4% 77.1% 64.0% 75.0% 47.0% 

Filing and Account 

Services 

Customer Accuracy - 

Accounts (Phones) 95.5% 96.1% 96.0% 95.0% 95.0% 95.0% 

Filing and Account 

Services 

Percent Individual 

Returns Processed 

Electronically 

85.3% 86.4% 86.9% 87.0% 88.0% 89.0% 

Exam and Collections Examination Efficiency - 

Individual 148 143 121 118 134 129 

Exam and Collections Automated 

Underreporter Coverage 2.3% 2.3% 2.2% 2.0% 1.9% 1.9% 

Exam and Collections Automated Collection 

System Accuracy 95.3% 95.4% 94.7% 95.0% 95.0% 95.0% 

Description of Performance 

In FY 2017, the IRS continued to provide 

quality service to taxpayers and enforce the 

laws with integrity and fairness. However, the 

IRS was unable to maintain some of its 

performance levels due to ongoing resource 

and staffing constraints. The IRS continued to 

deliver improvements in key areas, including 

international, tax exempt, refund fraud, and 

identity theft. 

 

Taxpayer Services 

The IRS strives to deliver high quality and 

timely service to taxpayers and stakeholders 

and help them understand and meet their tax 

obligations. The IRS: 

Achieved an 86.9 percent individual e-file rate 

and a 52.9 percent business e-file rate; 

 Delivered a fiscal year telephone LOS of 

77.1 percent; 

 Answered more than 23 million calls, and 

addressed another 18 million calls through 

automated systems. The average speed of 

answer was eight minutes, compared to 

18 minutes in fiscal year 2016; and 

 Answered 96.0 percent of account 

questions over the telephone correctly. 

The IRS continues to improve and expand its 

outreach and educational services through 

partnerships with state taxing authorities, 

volunteer groups, and other organizations. 

Volunteer Income Tax Assistance (VITA) and 

Tax Counseling for the Elderly (TCE) sites 

provided free tax assistance for the elderly, 

disabled, and limited English proficient 

individuals and families. 

Enforcement 

In FY 2017, the IRS collected $56.9 billion 

through enforcement programs, a return on 

investment (ROI) of about $5.1 to $1 for all 

appropriations. For Enforcement only, the 

projected ROI is $12 to $1. This number is 

likely understated, since the ROI estimate does 

not include the revenue effect of the indirect 

deterrence value of IRS enforcement 

programs, which is conservatively estimated to 

be at least three times the direct revenue effect. 

The IRS CI program investigates potential 

criminal violations of the Internal Revenue 

Code and related financial crimes, such as 
Department of the Treasury – Budget in Brief 

money laundering, currency violations, 

tax-related identity theft fraud, and terrorist 

financing that adversely affect tax 

administration. 

In FY 2017, CI completed 3,089 criminal 

investigations, within 0.4 percent of the 

year-end target. 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 than 

identity-theft/refund fraud cases that 

contributed to prior year completions. CI 

obtained 2,300 convictions in FY 2017. 

During the past year, the IRS maintained its 

international enforcement presence, leveraged 

the tax return preparer community, and 

prioritized refund fraud prevention. The IRS 

stopped $5.2 billion in fraudulent refunds 

claimed by identity thieves on 567,000 tax 

returns using new screening criteria. In 

addition, the IRS continued to work with its 

Security Summit partners from state tax 

agencies and the broader tax community to 

add extra layers of security protection for the 

filing season. During the year, the IRS issued 

news releases about scams and tax tips to 

advise taxpayers and tax professionals. 

Business Systems Modernization 

IRS modernization efforts continued in 

FY 2017. Some key accomplishments were: 

 Deployed several CADE 2 Transition State 

2 projects for filing season 2017, which 

allowed a more effective way to record and 

retain taxpayer history, corrected 

automated failure to pay calculations for 

the adjusted refundable credits, and 

aggregated and provided taxpayer data to 

downstream systems across the IRS; 

 Deployed maintenance and enhancements 

for the Return Review Program in 

preparation for the 2017 filing season, 

which allowed for receipt of Forms W-2, 

Wage and Tax Statement, directly from 

reporting agents and other Form W-2 

issuers earlier in the filing season to verify 

income and reduce fraud and anomalies. 

Receiving the Form W-2 information 

earlier allowed the IRS to release correct 

returns sooner in the fraud detection 

process, which reduced taxpayer burden; 

and 

 Continued to enhance Web Applications to 

improve interactions and communications 

with taxpayers, employers, and third 

parties by providing a broad range of selfservice options, establishing secure 

information exchange options, and 

building internal capabilities. By enabling 

third parties and taxpayers to interact 

digitally with the IRS, the 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).