House Republicans have voted to cut IRS funding

House Republicans have voted to cut IRS funding

Incoming Speaker of the U.S. House Kevin McCarthy, R-Calif., speaks to reporters in Washington, Jan. 7, 2023.

Jon Cherry | Reuters

House Republicans voted Monday night to cut funding for the IRS, following a promise by Speaker-elect Kevin McCarthy to repeal money passed by Congress last year.

Cutting along party lines, the bill would cancel tens of billions allocated to the agency over the next decade through the Inflation Reduction Act passed in August.

The measure lacks the support to pass the Democratic-controlled Senate, and the White House opposed the bill in a statement released Monday.

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“It’s not going to become law, but it makes a very strong political statement,” said Mark Everson, a former IRS commissioner and current vice president at Alliantgroup, noting that the partisan split of the IRS is not good for the “long term.” of the agency. stability”.

The bill comes less than two weeks after Democratic members of the House Ways and Means Committee released six years of former President Donald Trump’s tax returns, angering many Republican lawmakers.

Known as the Family and Small Business Taxpayer Protection Act, the new House Republican measure would increase the budget deficit by more than $114 billion by 2032, according to the Congressional Budget Office.

IRS funding has faced ongoing scrutiny

Treasury Secretary Janet Yellen in August outlined priorities for new IRS funding — including plans to clean up the backlog of unprocessed tax returns, improve customer service, overhaul technology and hire more workers.

However, the House Republican bill underscores the party’s continued opposition to President Joe Biden’s agenda, including more funding for the IRS. The agency is expected to submit the financing plan in February at Yellen’s request.

The agency is also preparing for a new commissioner, expected to be Danny Werfel, who served President Barack Obama and President George W. Bush as acting IRS commissioner and comptroller of the Office of Management and Budget.

Winning the nomination to serve as chairman of the House Committee on Monday, Rep. Rep. Jason Smith, R-Mo., said in a statement that the new IRS commissioner should “plan on taking a long time” before the committee answers questions.

While the success or challenges of the upcoming tax filing season could shape future discussions, the agency still has issues to address, Everson said.

“I hope that after the dust settles on this, both sides will take a step back and find a way to work cooperatively and make improvements in tax administration that are much needed,” he added.

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