Agency: Internal Revenue Service
Description:
To provide taxpayer services, including pre-filing assistance and education, filing and account services, taxpayer advocacy services.
Bill Section:
10301(1)(a)(i)
US Code:
5 USC 3109
New or Existing:
Existing
Potential Cost:
$3,181,500,000
Timeline:
FY22-31
Implementation Status/Rulemaking:
The Treasury Inspector General For Tax Administration (TIGTA) reported the Internal Revenue Service had expended approximately $561 million in IRA Taxpayer Services funding as of June 30, 2023: Source
As of September 30, 2023, TIGTA reported the Internal Revenue Service had expended approximately $889.6 million in IRA Taxpayer Services funding: Source
On October 20, 2023, the Internal Revenue Service announced new initiatives to improve taxpayer services, funded through the Inflation Reduction Act: Source
TCS Notes:
In addition to the funding for Taxpayer Services, Enforcement, Operations Support, Business Systems Modernization, and Free Direct Efile Task Force, the IRA appropriated $403 million to the Treasury Inspector General for Tax Administration, $104.5 million to the Office of Tax Policy, $153 million to the United States Tax Court, and $50 million to the Departmental Offices of the Department of the Treasury for oversight and implementation of the IRA.
In 2023, the Fiscal Responsibility Act (debt ceiling deal) cut the Internal Revenue Service funding boost by up to $21.4 billion over three years – rescinding $1.4 billion in IRA funds immediately, $10 billion in FY24, and another $10 billion in FY25. According to IRS officials, the $1.4 billion rescission in 2023 came from the Enforcement appropriation. A decision has not been reached on which appropriation accounts the $20 billion in FY24 and FY25 recessions will impact. The estimated cost listed above is the original IRA appropriations and does not reflect the Fiscal Responsibility Act recissions.
The Congressional Budget Office (CBO) projected increased revenue of $204 billion from 2022-2031 as a result of Internal Revenue Service investments in its Aug. 2022 CBO score, but the later CBO estimate in Sept. 2022 estimated a lower level of expected revenues – $180.4 billion. The Fiscal Responsibility Act funding cuts would reduce revenues further.