Congressional Republicans succeeded in slashing funding for the Internal Revenue Service in the negotiations over President Biden’s $1.7 trillion omnibus budget.
Senate Republicans forced Democrats and the White House to cut more than $275 million from the IRS over the next year. GOP lawmakers demanded the cut, arguing that the IRS is already slated to receive additional money over the next decade thanks to Biden’s recently passed $739 billion Inflation Reduction Act.
“This process was far from perfect, but ultimately it allowed Republican redlines to be adhered to and because of that I will urge my colleagues to support this package,” said Alabama Sen. Richard Shelby, the top Republican on the Senate Appropriations Committee.
Overall, the budget allocates $12.3 billion for the IRS — 2.2% less than the nearly $12.6 billion the agency received in the last fiscal year. The Biden administration initially sought a $1.3 billion increase for the IRS this year.
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The budget deal does not include additional money for the IRS to modernize its tax processing infrastructure. IRS Commissioner Charles Rettig has said that agency’s antiquated computer system was responsible for a large backlog in process returns over the past two years.
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Biden’s Inflation Reduction Act, which passed Congress over the summer, included $80 billion in additional funding for the IRS over the next decade. Democrats argued the money would help crack down on wealthy tax cheats, while Republicans said it would only hurt the middle class.
“Democrats have invested $80 billion into the agency to hire 87,000 new IRS agents,” said Rep. Vern Buchanan, R-Fla. “Everyone is worried about what these IRS agents will do, and we’re committed to holding the agency accountable.”
Republicans, who won control of the U.S. House of Representatives in the midterms, are set to make IRS oversight a top priority next Congress.
“The American people are demanding oversight of this administration,” said Rep. Jason Smith, R-Mo. “Over the years, they’ve seen an IRS that has targeted conservatives. They’ve seen an IRS that has allowed taxpayer information to be leaked for political gain.”