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Federal Tax

House Passes Measure Clawing Back Nearly $80 Billion from IRS

Jeff Carlson  

Jeff Carlson  

The House of Representatives on January 10 approved a measure that would rescind almost all the $80 billion provided by Congress for the IRS to step up tax enforcement.

The Family and Small Business Taxpayer Protection Act (H.R. 23) was approved 221-210 along a party line vote and would cancel $45.6 billion for stepped-up tax enforcement and $25.3 billion for agency operations support, which covers administration activities, IT development and telecommunications. The measure leaves some funds for the IRS to use: $3.2 billion for the improvement of taxpayer services and $4.8 billion for technology development aimed at improving customer service phone lines.

“The IRS does not need a raise. It needs a reckoning,” said incoming Ways and Means Chairman Jason Smith, Republican Representative of Missouri. “House Republicans are ready to provide oversight and accountability and that starts today.”

The measure is destined to die in the Senate however, as Democrats loudly denounced the legislation. The Biden administration issued a Statement of Policy affirming that the president would veto the measure, calling it a “reckless bill. Senate Majority Leader Charles Schumer, Democratic senator of New York, said that “this is a giveaway to the multimillionaires and big corporations, and Democrats won’t let it happen.”

The $80 billion in funds was part of the Inflation Reduction Act (PL 117-169) passed in 2022 and was meant for the IRS to hire 87,000 IRS employees and modernize the agency’s antiquated technology systems.

In its analysis of the Inflation Reduction Act, the nonpartisan Congressional Budget Office (CBO) found last year that the $80 billion included under the law would result in a net gain of $124 billion in revenue over the next decade. In a report published January 9, the CBO said that the House GOP bill to defund the agency would increase the deficit by more than $114.3 billion over the coming decade if enacted.

 

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