House Democrats urge congressional leaders to support $12.1B budget for IRS

A group of House Democrats are urging key members of Congress to support the $12.1 billion IRS budget for fiscal 2021 proposed in legislation that passed the House, as lawmakers work to finalize a government funding package in the coming days.

The $12.1 billion level proposed by the Democratic-controlled House includes $5.2 billion for enforcement purposes.

A proposal released by the Republican-controlled Senate Appropriations Committee calls for an overall IRS funding level for 2021 of $11.5 billion and an enforcement budget of $5 billion, maintaining the enacted levels for fiscal 2020.

“We urge you to retain the House-passed funding level of $12.1 billion for the Internal Revenue Service (IRS), including $5.2 billion for enforcement activities that are critical to ensuring compliance with our voluntary tax system and protecting taxpayer dollars from fraud,” the Democratic lawmakers said in a letter to House Speaker Nancy Pelosi (D-Calif.), Senate Majority Leader Mitch McConnell (R-Ky.), and the leaders of the House appropriations subcommittees with jurisdiction over the IRS.

Lawmakers who signed the letter include a number of Democratic members of the tax-writing House Ways and Means Committee, including Reps. Judy Chu (D-Calif.) and Bill Pascrell (D-N.J.).

The IRS saw budget cuts during much of the last decade. Democrats have been pushing to boost the agency’s funding to enhance the agency’s taxpayer services and enforcement, and some Republicans have also expressed openness to providing the IRS with more resources.

The signers of the letter said that “the strength of IRS enforcement activities must be a priority for Congress, especially considering the additional measures Congress enacted under the CARES Act to lessen the financial burden of the COVID-19 pandemic.”

They noted that much of the recent work by the IRS Criminal Investigations Division has focused on fraud connected to coronavirus relief programs, such as the stimulus payments and the Paycheck Protection Program.

The lawmakers also pointed to a recent estimate from the Congressional Budget Office that found that increasing the IRS’s funding for collections and enforcement by $20 billion over a decade would increase revenue by $61 billion. They said that more funding for IRS enforcement could help ensure that taxes owed by the wealthiest individuals are effectively collected.

Congress needs to pass appropriations legislation by Dec. 11 in order to prevent a government shutdown.