This testimony examines the administration's fiscal year 1996 budget request for the Internal Revenue Service (IRS) and the status of the 1995 filing season. GAO discusses four main issues--the status of IRS' Tax Modernization program, IRS' efforts to control tax refund fraud, the steps that might be taken to make the earned income credit easier to administer and less susceptible to fraud, and the ability of taxpayers to reach IRS by telephone.