In a major victory for Republican lawmakers, Congress has successfully cut funding for the Internal Revenue Service (IRS) in negotiations over President Biden’s $1.7 trillion omnibus budget.
Senate Republicans, led by Alabama Sen. Richard Shelby, forced Democrats and the White House to reduce funding for the IRS by over $275 million for the next fiscal year.
This move was supported by GOP lawmakers who argued that the IRS is already set to receive additional funding in the coming years thanks to Biden’s $739 billion Inflation Reduction Act, which allocated $80 billion to the agency over the next decade.
“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 Sen. Shelby.
The final budget agreement allocates $12.3 billion for the IRS, a decrease of 2.2% from the previous fiscal year’s funding of $12.6 billion. The Biden administration had originally requested a $1.3 billion increase in funding for the IRS for this year.
Notably, the budget deal does not include any additional funding for modernizing the IRS’s tax processing infrastructure, which has been a source of frustration for taxpayers in recent years.
IRS Commissioner Charles Rettig has pointed to the agency’s outdated computer system as a major contributor to the backlog in processing returns.
Republicans, who regained control of the U.S. House of Representatives in the midterm elections, have pledged to make IRS oversight a top priority in the coming 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.”