IRS To Receive $1B Funding in House Committee Proposal

On June 14th, The House Appropriations Committee released its draft fiscal year 2023 Financial Services and General Government funding bill. The legislation provides annual funding for the Treasury Department, the judiciary, the Executive Office of the President, and other agencies, including the Small Business Administration. For FY 2023, the bill provides a total of $15.6 billion in discretionary appropriations for the Treasury Department, including $13.6 billion for the IRS.

The $1 billion increase from FY 2022 incorporates improving customer service, enforcing fairness in the tax system, and modernizing IRS systems. Of the total amount, the bill includes $3.4 billion, an increase of $630 million above fiscal year 2022’s enacted level, for taxpayer services. That encompasses support for the Volunteer Income Tax Assistance Matching Grants Program, Low Income Taxpayer Clinic, the Taxpayer Advocate, Tax Counseling for the Elderly, and more employees to improve IRS customer service. There’s also $6.1 billion, a boost of $682 million, above the enacted level for FY 2022, for enforcement. The funds will support increased enforcement efforts and essential personnel. Also in the package is $3.8 billion for IRS overhead functions for operations support. 

To improve the IRS’s antiquated technology systems, the package includes $310 million, an increase of $35 million above 2022’s level, for business systems modernization to update the IRS’s legacy systems, some of which date back to the 1960s, and improve IRS web applications and tax filing processing. To ensure the money is being spent carefully, there’s also funding for inspector generals at the Treasury Department, including the Treasury Inspector General for Tax Administration. The package includes $253 million for inspectors’ general offices across the Treasury in fiscal 2023, an increase of $13 million above the enacted level for fiscal 2022, to provide robust oversight of departmental policies and practices.

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