{"id":28052,"date":"2023-10-30T18:10:24","date_gmt":"2023-10-30T18:10:24","guid":{"rendered":"https:\/\/one.sightlinemg.com\/federaltimes\/uncategorized\/2023\/10\/30\/despite-60-billion-on-way-irs-seeks-more-money-to-keep-operating\/"},"modified":"2026-08-08T05:06:09","modified_gmt":"2026-08-08T05:06:09","slug":"despite-60-billion-on-way-irs-seeks-more-money-to-keep-operating","status":"publish","type":"post","link":"https:\/\/one.sightlinemg.com\/federaltimes\/congress\/budget\/2023\/10\/30\/despite-60-billion-on-way-irs-seeks-more-money-to-keep-operating\/","title":{"rendered":"Despite $60 billion on way, IRS seeks more money to keep operating"},"content":{"rendered":"\n<p class=\"wp-block-paragraph\">The IRS is asking for more money in fiscal 2024 to sustain day-to-day operations after Congress approved most of a Biden administration request for tens of billions of dollars for hiring and modernization at the revenue agency.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Lawmakers on the House Oversight Committee asked Commissioner Danny Werfel last week whether he had enough money for his vision to update the IRS\u2019 outdated technology. He responded that the agency cannot rely on the $60 billion contained in <a href=\"https:\/\/www.federaltimes.com\/home\/2023\/10\/24\/high-attrition-erodes-irs-staffing-progress-watchdog-says\/\" target=\"_blank\">the 2022 Inflation Reduction Act<\/a> alone.<\/p>\n\n\n\t<aside class=\"smg-interstitial-link wp-block-smg-interstitial-link\">\n\t\t<a href=\"https:\/\/one.sightlinemg.com\/federaltimes\/home\/2023\/10\/24\/high-attrition-erodes-irs-staffing-progress-watchdog-says\/\" class=\"smg-interstitial-link__inner\">\n\t\t\t\t\t\t\t<div class=\"smg-interstitial-link__media\">\n\t\t\t\t\t<img loading=\"lazy\" decoding=\"async\" width=\"300\" height=\"200\" src=\"https:\/\/one.sightlinemg.com\/wp-content\/uploads\/2026\/08\/AP23043822947700.jpg.jpg?w=300\" class=\"smg-interstitial-link__image wp-post-image\" alt=\"\" \/>\t\t\t\t<\/div>\n\t\t\t\t\t\t<div class=\"smg-interstitial-link__content\">\n\t\t\t\t<span class=\"smg-interstitial-link__kicker\">Related<\/span>\n\t\t\t\t<h3 class=\"smg-interstitial-link__title\">High attrition jeopardizes IRS staffing progress, watchdog says<\/h3>\n\t\t\t\t\t\t\t\t\t<p class=\"smg-interstitial-link__excerpt\">Lawmakers on the House\u2019s oversight committee were keen on hearing hiring breakdowns for the IRS.<\/p>\n\t\t\t\t\t\t\t<\/div>\n\t\t<\/a>\n\t<\/aside>\n\t\n\n\n<p class=\"wp-block-paragraph\">\u201cThe answer to the question is: we have enough money as long as Congress appropriates our base budget [and] gives us enough money to run the daily train schedules,\u201d Werfel said at a hearing Oct. 24. \u201cThen we have enough money to get our job done.\u201d<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Some Republicans have balked at funding the IRS further over concerns of the agency overstepping its authority.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The <a href=\"https:\/\/www.federaltimes.com\/federal-oversight\/congress\/2023\/05\/25\/debt-ceiling-talks-teeter-on-brink-as-lawmakers-leave-town\/\" target=\"_blank\">debt ceiling agreement<\/a> signed by President Joe Biden in June scaled back the $80 billion originally sought by the White House over a decade, paring back $10 billion each year for fiscal 2024 and 2025.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u201cI think we can all agree that [the approved IRA funding is] an incredible amount of money,\u201d said Rep. Virginia Foxx, R-N.C. \u201cThat\u2019s a lot of money, even in today\u2019s day &#8230; even after Congress trimmed this amount down to nearly $60 billion in the Fiscal Responsibility Act.\u201d<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">However, the agency\u2019s request for a higher budget should not be a surprise given the IRA was never intended to supplant appropriations, policy and tax experts told Federal Times.<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"5183\" height=\"3372\" src=\"\/wp-content\/uploads\/2026\/08\/AP23265835020754.jpg.jpg\" alt=\"\" class=\"wp-image-74587\" srcset=\"https:\/\/one.sightlinemg.com\/wp-content\/uploads\/2026\/08\/AP23265835020754.jpg.jpg 5183w, https:\/\/one.sightlinemg.com\/wp-content\/uploads\/2026\/08\/AP23265835020754.jpg.jpg?resize=300,195 300w, https:\/\/one.sightlinemg.com\/wp-content\/uploads\/2026\/08\/AP23265835020754.jpg.jpg?resize=768,500 768w, https:\/\/one.sightlinemg.com\/wp-content\/uploads\/2026\/08\/AP23265835020754.jpg.jpg?resize=1024,666 1024w, https:\/\/one.sightlinemg.com\/wp-content\/uploads\/2026\/08\/AP23265835020754.jpg.jpg?resize=1536,999 1536w, https:\/\/one.sightlinemg.com\/wp-content\/uploads\/2026\/08\/AP23265835020754.jpg.jpg?resize=2048,1332 2048w\" sizes=\"auto, (max-width: 5183px) 100vw, 5183px\" \/><figcaption class=\"wp-element-caption\">Doors at the Internal Revenue Service (IRS) in the Henry M. Jackson Federal Building are locked and covered with blinds as a sign posted advises that the office will be closed during the partial government shutdown Jan. 16, 2019, in Seattle.  (AP Photo\/Elaine Thompson)<\/figcaption><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\">The IRS estimated it would need <a href=\"https:\/\/www.tigta.gov\/sites\/default\/files\/reports\/2023-10\/2024ier002fr.pdf\" target=\"_blank\">$818 million more<\/a> than it received in 2023 just to maintain services after years of stagnant budgets and workforce shortages.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u201cAs one example, there are approximately 6,500 field revenue agents and IRS receives more than 4 million partnership returns annually,\u201d said former IRS Commissioner Chuck Rettig, who served in the Trump administration, to Federal Times. \u201cIt would be impossible to examine a meaningful percentage of these returns, coupled with other examination activities.\u201d<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u201cFrom any perspective, annual appropriations of $12-13 billion in addition to $60 billion over 10 years is a significant amount of long-term funding for any government agency,\u201d he continued, though that range is still insufficient to fully meet demands on the agency while the tax code has grown in complexity.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Accounting for inflation, IRS funding overall has been cut by 21%, said Chye-Ching Huang, senior director for economic policy at <a href=\"https:\/\/www.cbpp.org\/research\/federal-tax\/depletion-of-irs-enforcement-is-undermining-the-tax-code\" target=\"_blank\">the Center on Budget and Policy Priorities<\/a> in a 2020 testimony before the House Ways and Means Committee.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">An Oct. 10 <a href=\"https:\/\/www.tigta.gov\/sites\/default\/files\/reports\/2023-10\/2024ier002fr.pdf\" target=\"_blank\">inspector general report<\/a> noted that without a restoration of annual appropriations, IRA funding will cover only about two-thirds of modernization plans.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Divisive issue<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Funding the IRS has been a divisive issue on Capitol Hill, though. Wary lawmakers said they don\u2019t want to see increased audit rates and law enforcement on low- and middle-income families and small businesses. The agency has vehemently denied that, saying instead it\u2019s focusing on wealthy tax cheats, evasive corporations and overhauling legacy IT to improve returns processing.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u201cWe are putting the money to work today to take a variety of different steps,\u201d Werfel said. \u201cWe\u2019re increasing the number of audits on our largest corporations using analytics that we\u2019ve invested in to make sure that we select the right corporations that are the highest risk of shielding income inappropriately. We\u2019ve increased the number of audits on complex partnerships, something that [<a href=\"https:\/\/www.gao.gov\/assets\/gao-23-104719.pdf\" target=\"_blank\">the Government Accountability Office<\/a>] has pointed out \u2014 how anemic our partnership audit rate is.\u201d<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Another issue for the agency is modernization of its technology in order to support growing demands of it. About 32% of the agency\u2019s self-identified legacy software is at least four versions behind the current one, <a href=\"https:\/\/www.gao.gov\/assets\/gao-23-104719.pdf\" target=\"_blank\">according to GAO. <\/a><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Thus, one bucket of the IRA was devoted to modernization.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u201cIt\u2019s very, very large and very, very impactful,\u201d Werfel said. \u201cThe issue however, is our base budget \u2014 our annual budget to run the trains every day. And that\u2019s been underfunded and is still underfunded.\u201d<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Werfel said if that trend continues, the IRA money, which is capped and divided into four categories, could be siphoned to fill gaps in the appropriated budget. And some of that money has already been spent.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u201cParticularly in the service functions, a relatively small amount of the IRA package was devoted to service improvements,\u201d said Alex Muresianu, a federal policy analyst for the Tax Foundation, in an interview. \u201cI think about $3.2 billion out of the $80 billion [originally] allocated, and they have spent quite a lot of it quickly to rapidly improve service.\u201d<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">That means the agency has spent about 23% of the money it was given for taxpayer services, putting it on schedule to exhaust remaining funds within three or four years, according to the agency.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">As for IT upgrades, the IRS announced last week it\u2019s <a href=\"https:\/\/www.federaltimes.com\/management\/2023\/10\/17\/irs-to-invite-select-taxpayers-for-test-of-e-file-return-system\/\" target=\"_blank\">rolling out a pilot program for a free, direct-file tax system <\/a>in certain states. It\u2019s also trying to make up for delays on retiring its 60-year-old data system. A new deadline has been set for 2028.<\/p>\n\n\n\t<aside class=\"smg-interstitial-link wp-block-smg-interstitial-link\">\n\t\t<a href=\"https:\/\/one.sightlinemg.com\/federaltimes\/federal-oversight\/watchdogs\/2023\/02\/08\/federal-agencies-stymied-by-ancient-it-infrastructure-staffing-woes\/\" class=\"smg-interstitial-link__inner\">\n\t\t\t\t\t\t\t<div class=\"smg-interstitial-link__media\">\n\t\t\t\t\t<img loading=\"lazy\" decoding=\"async\" width=\"300\" height=\"169\" src=\"https:\/\/one.sightlinemg.com\/wp-content\/uploads\/2026\/08\/GettyImages-890155054.jpg.jpg?w=300\" class=\"smg-interstitial-link__image wp-post-image\" alt=\"\" \/>\t\t\t\t<\/div>\n\t\t\t\t\t\t<div class=\"smg-interstitial-link__content\">\n\t\t\t\t<span class=\"smg-interstitial-link__kicker\">Related<\/span>\n\t\t\t\t<h3 class=\"smg-interstitial-link__title\">Federal agencies stymied by ancient IT infrastructure, staffing woes<\/h3>\n\t\t\t\t\t\t\t\t\t<p class=\"smg-interstitial-link__excerpt\">Such outdated equipment is a risk, GAO warns, as \u201cmalicious actors are becoming more willing and capable of carrying out cyberattacks.\u201d<\/p>\n\t\t\t\t\t\t\t<\/div>\n\t\t<\/a>\n\t<\/aside>\n\t\n\n\n<p class=\"wp-block-paragraph\">\u201cThings like making really big technological improvements, you need years of budget certainty to do that,\u201d said Samantha Jacoby, senior legal tax analyst at CBPP. \u201cWhat we\u2019ve seen with the discretionary budget is these cuts and freezes, and it\u2019s really hard for the IRS to say, \u2018In three years, we\u2019ll have this much money.\u2019 But with the IRA, they can do that.\u201d<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Hiring, too, can benefit from this assured source of funding after more than 100 continuing resolutions since 2001 have hindered the IRS\u2019 ability to replace retiring employees, Rettig said.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Jacoby also said the President\u2019s budget request of $14.1 billion for this fiscal year also accounts for inflation, while the IRA\u2019s levels are set. The details of the agency\u2019s 2024 budget have not yet been negotiated by Congress after lawmakers passed a continuing resolution in September.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Funding the IRS has been a divisive issue on Capitol Hill.<\/p>\n","protected":false},"author":7,"featured_media":53121,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_yoast_wpseo_meta-robots-noindex":"","_yoast_wpseo_meta-robots-nofollow":"","_yoast_wpseo_canonical":"","_acf":"","_yoast_wpseo_primary_category":65,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","_smg_distribution_targets":[]},"categories":[65,38,31,15,33,9],"tags":[],"coauthors":[3269],"class_list":["post-28052","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-budget","category-congress","category-home","category-management","category-newsletters","category-federal-oversight"],"acf":{"subheadline":"","legacy_arc_id":"ECZ53US5S5E75NPKGJ2PNAAE6Q","arc_canonical_url":"\/management\/budget\/2023\/10\/30\/despite-60-billion-on-way-irs-seeks-more-money-to-keep-operating\/","remove_feature_photo":false,"is_sponsored":false,"subtype":"","redirect_url":"","disable_inline_ads":false,"native_logo_pretext":"Presented By:"},"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v26.0 (Yoast SEO v28.1) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>Despite $60 billion on way, IRS seeks more money to keep operating - Federal Times<\/title>\n<meta name=\"description\" content=\"Funding the IRS has been a divisive issue on Capitol Hill.\" \/>\n<meta name=\"robots\" content=\"noindex, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Despite $60 billion on way, IRS seeks more money to keep operating\" \/>\n<meta property=\"og:description\" content=\"Funding the IRS has been a divisive issue on Capitol Hill.\" \/>\n<meta property=\"og:url\" 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