After taking their first close look at some of the revenue proposals in President Bush's budget, congressional tax writers say they doubt that $3-billion can be raised next year through management initiatives at the Internal Revenue Service. Next to Bush's proposal for a cut in the capital gains tax rate, which the administration says would bring the Treasury $4.9-billion in fiscal 1991, the IRS initiatives to find legitimate sources of taxes that have not yet been tapped would account for the second largest chunk of new revenue in the budget.
The tax writers say the initiatives, some of which involve beefed-up enforcement and examinations, are questionable as revenue raisers under the best of circumstances.
They are particularly skeptical now because most of the new revenue, some $2.5-billion, would be generated without significant new spending by the tax agency and because of longstanding IRS difficulties in tracking and collecting billions of dollars in money already owed by delinquent taxpayers.
"Every year the administration would like the IRS to raise more money by waving a magic wand, but they are never willing to spend the money to make the money," said a senior aide on the House Ways and Means Committee.
By its own calculation, the IRS is owed $61-billion in delinquent taxes, including more than 3,000 cases in which the amount owed exceeds $1-million a case and several hundred in which the amount owed exceeds $10-million a case.
A 1989 study by the tax agency showed that amount of uncollected delinquent taxes rose rapidly in the last decade and by 1988 amounted to 7.67 percent of total federal receipts.
"It's not practical to assume they are going to get more revenue when they can't even collect the money already owed to the government," said Rep. J.J. Pickle, the Texas Democrat who heads the House Ways and Means subcommittee that oversees the IRS.
IRS officials including the commissioner, Fred Goldberg, will appear before Pickle's subcommittee today to discuss the agency's plans for meeting the $61-billion backlog.