Internal Revenue Bureau seeks $14.06M for FY2026 as collections rise to $599M through May

Joel Ailey, director of the Bureau of Internal Revenue, presented a $14,060,535 FY2026 operating budget to the legislature on June 10, 2025. The request is fully funded from the general fund and is centered on personnel: 133 positions (89 St. Thomas, 43 St. Croix, 1 St. John) and related fringe costs.

Collections and refunds Ailey reported collections of approximately $599 million for October–May (compared with $566 million for the same period the prior fiscal year). He attributed increases in part to national economic activity and stronger enforcement steps. The bureau said it has paid $34.9 million in refunds this fiscal year and had about $42 million in refunds processed and ready to pay at the hearing; staff said they have begun paying 2023 refunds and activated an online filing option for 2024 returns (937 registered users and $648,431 in payments logged through the new portal).

Operations, space and staffing The bureau said its FY2026 request covers 133 positions and operational needs including four rental locations (the main St. Thomas office at East End Plaza/Red Hook carries most of the rental cost), IT maintenance, postage and security. The bureau said it will close a satellite excise office at the St. Croix airport as an austerity measure. Staffing challenges remain: the bureau reported 21 vacancies and flagged difficulty recruiting revenue officers and tax examiners because of limited local supply of qualified accountants and competitive private‑sector pay.

Concerns raised in questioning Committee members pressed the bureau on: reconciliation timeliness, audit completion and staffing; the cost and timing of office rent (Red Hook); aging of accounts payable in other departments that affect IRB’s ability to reconcile revenues; and the tourism revolving fund balance — a figure of roughly $88.09 million cited by internal accounting staff drew immediate requests for a reconciled ledger and breakout.

Discussion vs. direction vs. decisions - Discussion: senators reviewed the IRB’s collection gains, the backlog of refunds and the difficulty recruiting specialized staff. Questions focused on reconciliation and the bureau’s large rental expense. - Direction: committee requested detailed reconciliations for the tourism revolving fund, a schedule of refunds awaiting payment and an updated vacancy list and hiring plan. - Decision: No appropriation vote; the bureau’s request will move through the normal budget process.

What’s next: IRB will provide the committee with requested supporting documents including detailed refunds inventory, reconciliations and vacancy/hiring updates.