Treasury Secretary James Baker saidthat over the long-term the tax reform bill and lower marginal
tax rates should increase compliance with the tax law and bring
in additional revenue.
    In testimony before a senate appropriations subcommittee
Baker said no savings in the Treasury's budgetary requirements
wil be achieved in the short-run by the new tax law.
    "The tax changes occurring in 1987 and 1988 under tax reform
will not directly effect IRS enforcement activities until
financial year 1989 and 1990."
    He told the subcommittee that the Treasury's objective was
to strengthen the capability of the Internal Revenue Service to
promote tax compliance and generate revenue.
    He said they were seeking funds to increase staffing to
reduce the backlog of delinquent tax accounts, reducing pending
tax litigation cases under appeal, and resolving unreported
income cases disclosed through a program that matches third
party documents to returns.
    "This request will continue our effort to build a stronger
and more credible deterrent against non-compliance with tax
laws," he said.
    Baker also told the subcommittee that the administration
would continue the efforts to improve the management of the
government's cash and credit, and its financial information.
     In addition a policy of full reimbursement to Federal
Reserve Banks for the fiscal agent services they provide in
marketing and maintaining Treasury securities will be
continued.
 Reuter
