IRS chief urges Congress to back proposed $80B funding boost to agency

IRS Commissioner Charles Rettig on Thursday urged Congress to support the Biden administration’s proposal to provide the agency with an additional $80 billion over 10 years, which is expected to be included in Democrats’ social spending package.

“The funding proposal offers a historic opportunity to help the IRS help others,” Rettig wrote in a Washington Post op-ed. “Congress must act.”

The Biden administration and congressional Democrats are seeking to enact a wide-ranging bill that aims to strengthen the social safety net and combat climate change. They have said that the costs of the bill would be fully offset.

One way that Democrats are seeking to help pay for the social spending package is by giving the IRS an additional $80 billion over the course of a decade to modernize the agency’s technology and strengthen its enforcement efforts against high-income households. The Biden administration initially proposed this funding increase earlier this year, and the proposal is also included in the most recent version of House Democrats’ bill.

The administration estimates that the proposal could generate an additional $400 billion in revenue over 10 years, though the Congressional Budget Office (CBO) may give a lower figure when it releases its full estimate of the House bill. The CBO in September said such a proposal to increase IRS funding would increase revenue by about $200 billion.

Rettig, who was appointed by former President Trump to a term that ends next year, said in his op-ed that the IRS is challenged by the fact that it has limited resources and an increasing amount of responsibility. He noted that the budget constraints make it more challenging for the IRS to go after wealthy individuals and corporations who aren’t pay the taxes they owe.

Any suggestions that the IRS wouldn’t be able to efficiently use the additional funds “ignore the fact that the IRS workforce is the same size as in 1970, though the population has grown by 60 percent and the complexity of the economy has increased exponentially,” Rettig said. 

Rettig argued that additional funding would help the IRS make a “sizable dent in noncompliance” and help to deter individuals and corporations from cheating on their taxes.

“Stable funding would allow us to finally build and train an effective workforce to collect the taxes owed,” he said.

Additionally, Rettig said the proposal for more funding is “about much more than enforcement.”

“This long-term investment would help build the modern IRS that Americans deserve,” Rettig said. “Imagine a system where any person with a laptop or a phone wouldn’t have to call the IRS to ask about their refund or return because that information would be easily available in their personal online accounts, in the language of their choice.”