WASHINGTON (AP) – House Republicans are trying to deliver on campaign promises to curb the IRS with cuts embedded in the debt ceiling and budget cuts. passed parliament.
The bill would reverse $1.4 billion given to federal tax collectors in a Democratic health and energy policy approved by a partisan vote last year. The debt deal also includes a separate agreement to receive $20 billion from the IRS over the next two years and divert the money to other non-defense programs, the White House said.
The bill passed the House on Wednesday and the Senate on Thursday. President Joe Biden said he would sign the bill into law as soon as possible.
Democrats spent a lot of money last year trying to get more money from the IRS. They faced an onslaught of campaign advertisements about their planned hiring of 87,000 “new agents,” many of which were misleading. Targeting middle and lower class Americans.
Now, Biden administration officials are assuring that spending cuts secured by Republican negotiators will have minimal impact on agency operations over the next few years.
The agency is still on track to win nearly three-quarters of the $80 billion in grants Congress approved last year. And officials stressed that they have the flexibility to spend some of that money earlier than planned.
Deputy Treasury Secretary Wally Adiemo tweeted, “The IRS has the resources it needs in the near term to improve customer service and pursue high net worth individuals and corporate tax evaders.”
But for Republicans looking to win support for the bill, the IRS spending cuts became a key selling point.first invoice A bill passed by House Republicans this year would cancel most of the additional funding that Congress approved for the IRS the previous year. The bill got nowhere in the Democratic-controlled Senate.
As for the debt deal, “this puts the IRS at the forefront,” said Rep. Patrick McHenry (RN.C.), one of the key Republican negotiators.
“The bill includes a $1.4 billion down payment to cancel the hiring of executive officers this year,” McHenry said. “The appropriation process will come back for more.”
IRS leaders announced details in April He said how the agency will use the $80 billion to improve its operations, pledging to invest in new technology, hire more customer service representatives and expand its ability to audit large taxpayers. The plan details how the IRS will allocate the $80 billion through fiscal 2031.
Now that some of that funding has been returned, the question arises as to what programs will be on the back burner.Finance officials said they plan to develop an online free file tax filing system, which is in a pilot development stage.For example, it is not affected by cuts.
But some analysts are skeptical of the Biden administration’s commitments. “The loss of funding must be a setback” for the agency, said Steve Rosenthal, senior fellow at the Urban Brookings Center for Tax Policy.
“When money and resources are scarce, everything slows down. “I don’t know if this will happen through services, enforcement, technology or any other means.”
Rep. Richard Neal of Massachusetts, the top Democrat on the House Ways and Means Committee, said he had spoken to the Treasury Department about the impact of the debt-restriction bill’s cuts to the IRS, saying he was “at least satisfied, if not satisfied.” I’m back,” he said.
He said it was understandable why the White House agreed to the cuts, as the possibility of default was a much bigger concern.
“The fact that funds are diverted to other initiatives is not my first choice, but in terms of the international catastrophe, I think it has to be done to cross the finish line. he said. .
Neal said he didn’t believe the IRS would suffer much from the cuts, adding: “That’s what I guarantee.”
The Congressional Budget Office estimates that the $1.4 billion cancellation will actually increase the budget deficit by about $900 million over the next decade, as it reduces incoming tax revenue. It’s been 10 years and revenue collection is declining.” Report on May 30 To Chairman Kevin McCarthy, Republican Party of California.
The CBO’s projections do not include the $20 billion the White House has agreed to divert to other programs.
Rep. Brendan Boyle, the top Democrat on the House Budget Committee, said former President Donald Trump’s self-appointed IRS director had repeatedly raised the dramatic staffing shortages facing the agency to Congress. . Boyle said the IRS’s enforcement staff has dropped by about a third since 2010, so low-income and minority taxpayers are being audited at a higher rate than the wealthy.
“We are very concerned that some of these cuts could impact the direction the IRS is headed, which will bring more fairness when talking about audits,” Boyle said. . “That’s definitely one I’ll be following up on over the next few weeks and months.”
Arguing for an IRS cut just before the House vote on Wednesday night, Republican Louisiana Rep. Garrett Graves applauded the Republican effort.
“I’ve never had a voter say, ‘Oh, I wish I had more audits,'” Graves said.