Appropriations Bill Cuts IRS Budget for Sixth Straight Year

by Bruce Givner on June 16, 2015

The House Appropriation Committee’s fiscal year 2016 financial services and general government spending bill will cut the Internal Revenue Service’s (IRS’s) budget for the sixth year in a row, slashing the agency’s budget by 7.7% as compared to last year.

The bill would fund the IRS at $10.1 billion, or $838 million less than last year’s budget and a full $2.8 billion short of the president’s request. In response to these numbers, agency officials and the National Treasury Employees Union have complained that budget cuts will continue to have deleterious effects on the agency’s capacity to do its job. Indeed, the impact of these cuts has already been felt by taxpayers, who last year had to endure longer lines at IRS centers and longer wait times for the agency’s call centers.

In response to these complaints, Republican lawmakers are mandating that at least $75 million of the $2.1 billion earmarked for taxpayer services in the latest spending bill be used to measurably improve the level of customer service, reduce the time required to solve tax refund fraud by identity theft, and improve response times when corresponding with taxpayers.

The proposed budget cuts affect the agency across the board, with tax enforcement and operations support losing $538 million and $338 million, respectively, while business systems modernization can look forward to $40 million less than what it received previously. Furthermore, the bill would also prevent the IRS from implementing the Affordable Care Act by restricting funds for that purpose.

A list of new policies the IRS must implement is included in the proposed budget cuts. These policies include: 1) eliminating proposed rules related to the tax code Section 501(c)(4) application process, 2) prohibiting funds for IRS employee bonuses, 3) not using funds to target groups based on political beliefs, 4) prohibiting funds for the production of “inappropriate” videos of conferences, and 5) compiling a report on its spending.

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