Biden’s $80 Billion IRS Enforcement Plan Thwarted as Congress Cuts Funding in Half
By Jake Beardslee ·
December 28, 2024
Congress has moved decisively to claw back a significant portion of the $80 billion allocated to the Internal Revenue Service (IRS) under the Biden administration’s 2022 Inflation Reduction Act (IRA). Junfu Han / USA TODAY NETWORK via Imagn Images
A recent stopgap spending bill, signed by President Joe Biden on December 20, rescinded $20 billion in supplemental IRS funding, bringing the total rescinded amount to over $40 billion since 2023. This represents more than half of the initial allocation aimed at bolstering tax enforcement and hiring additional IRS agents. Rob Schumacher/The Republic / USA TODAY NETWORK via Imagn Images
Republican lawmakers have long opposed the additional IRS funding, arguing it would lead to the agency targeting taxpayers and corporations. John Kartch, Vice President of Communications at Americans for Tax Reform, praised the latest rescission, calling it “20 billion we should never spend.” Carol M. Highsmith / Wikimedia
The funding cuts are a culmination of legislative actions throughout 2023, including the Fiscal Responsibility Act signed in June, which removed $1.4 billion from the IRS budget. These rescissions are viewed as a way to reduce government size and costs. Kartch emphasized the political implications of the IRS funding, telling the Daily Caller News Foundation, “Democrats recognize this [additional IRS enforcement funding] as political poison.” Pixabay
Treasury Secretary Janet Yellen has indicated that a significant portion of the remaining IRS funding is directed at auditing high-income earners and corporations. However, her testimony revealed that over 90% of audits conducted with supplemental funding would focus on individuals earning less than $400,000 annually. waketechcc / WIkimedia
The ongoing reductions in IRS funding are expected to limit the agency’s audit capabilities. Deputy Treasury Secretary Wally Adeyamo noted that without the full funding, the IRS would likely conduct 2,000 fewer audits of corporations and 6,000 fewer audits of high-income earners over the next five years. United States Department of the Treasury / Wikimedia
As the Republican Party continues to criticize the IRS funding, Kartch suggested the issue would remain a focal point for political campaigns, urging further cuts to the agency’s budget to “reduce the size and cost of government.” Pixabay
The IRS has spent less than $7 billion of the initial $80 billion allocation, according to a Treasury Department Inspector General report. With a new administration on the horizon, the potential for further budget cuts remains a significant point of contention. Carol M. Highsmith / Wikimedia
