$20 Billion in IRS Funding Cuts Now Clawed Back in FY 2024

Previously agreed upon cuts from the IRS' Inflation Reduction Act (PL 117-169) funds across fiscal years 2024 and 2025 would be front-loaded in 2024, as part of a bipartisan, bicameral agreement between congressional lawmakers reached over the weekend that sets a spending topline for fiscal 2024 appropriations.

Congress is tasked with taking action before a January 19 partial government shutdown deadline, and a February 2 full shutdown deadline. Agencies impacted by the earlier date include the departments of Agriculture, Transportation, Energy, Veterans Affairs, and Health and Human Services.

According to a January 7 letter from House Speaker Mike Johnson (R-LA), refers to debt ceiling negotiations between Republicans, Democrats, and the Biden administration. 

Last summer, Biden and then-Speaker Mike McCarthy struck a hand-shake deal to redirect portions of the once-$80 billion appropriation to the IRS under the Inflation Reduction Act beyond the $1.4 billion rescinded by the Fiscal Responsibility Act. The plan was to trim another $10 billion out of the enforcement bucket in fiscal 2024, and again an additional $10 billion the next year.

Under The Latest Agreement From The Hill, The
Fiscal 2025 $10 Billion Would Be Accelerated, Meaning
All $20 Billion Would Be Clawed Back This Year!

$6.1 billion would also be cut from the Biden administration's "continued COVID-era slush funds," the letter read, but Johnson acknowledged the final spending levels "will not satisfy everyone," nor will the cuts go as far "as many of us would like."

All of Those Aspirational Objectives to Guarantee Fairness in The Tax System Through Enforcement Are ALL GONE as a Result of this 2nd Debt Limit Bill!

Vice President for Federal Tax Policy Chuck Marr took issue with the proposal, also commenting on X in a thread that "[c]utting IRS funding is a bad idea overall."

"The IRS funding reduces wealthy tax cheating and raises revenue," said Marr. "We're already seeing great results. And remember: cutting IRS funding does not save money. It loses money. Lots of it. Congress should protect IRS funding to improve customer service and ensure wealthy taxpayers and corporations pay the taxes they legally owe, i.e. deliver what honest taxpayers deserve."

The White House, however, gave its stamp of approval to the deal, which the president said "moves us one step closer to preventing a needless government shutdown and protecting important national priorities."

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