Spending Bill Increases IRS Funding

In a rare success story relating to the IRS budget, President Obama signed into law on Friday a spending bill that provides an increase in funding to the Internal Revenue Service.  According to an article written for The Hill, Naomi Jagoda explains how the $1.1 trillion omnibus provides an additional $290 million for the IRS, an increase of 3 percent over the last fiscal year.

The IRS budget has been in a free fall ever since the controversy erupted over the agency’s heightened scrutiny of Tea Party groups.  In fiscal year 2015, Republican law makers continued the trend by slashing another $346 million – a budget at its lowest level since 2008.

The Center on Budget and Policy Priorities conducted an analysis of IRS numbers back in September.  The analysis notes that since 2010, the IRS’ budget has been cut 18% after adjusting foMoneyr inflation.  The result is over 13,000 fewer employees, lowest individual and business audits in more than a decade and fewer than half of customer service calls being answered.

In granting the boost to the budget, lawmakers specified that the funding is to be used for “taxpayer services to ensure that the agency responds to taxpayer questions in a timely manner, and to improve fraud detection and prevention and cybersecurity,” according to a summary from Republicans on the House Appropriations Committee.  Despite the compromise that lead to the additional funding, tensions are still running high between Republicans and the IRS with four articles of impeachment introduced in October still looming over the Commissioner of the beleaguered agency.

While the funding increase seems to signal a sign that some recognize the difficulties that the political infighting has created for taxpayers and practitioners, there is still quite a bit left to be done before the IRS can operate in a more proactive capacity.  What’s more, new laws will inevitably stretch the IRS even further than before. For example, the Affordable Care Act, private debt collector provision of the transportation bill as well as initiatives like the passport revocation program and return preparer licensing.  To address meaningful reform within the IRS, lawmakers have to restore the IRS’ budget to a level that allows it to realistically address its mission.