About | HeinOnline Law Journal Library | HeinOnline Law Journal Library | HeinOnline
LOG IN
LOG IN

1 1 (February 1, 2021)

handle is hein.crs/govecbm0001 and id is 1 raw text is: m ~ rn ~914 Updated February 1, 2021 Internal Revenue Service Appropriations, FY2021 Overview of Budget Request The Internal Revenue Service (IRS) has two primary responsibilities: (1) to collect most of the revenue to fund federal government agencies andprograms, and (2) to enforce taxpayer compliance with federal taxlaws . According to the IRS Data Book, in FY2019, the agency processed over 253 million taxreturns and 3.5 billion information returns, collected over $3.5 trillion in gross revenue, andis sued $452 billion in refunds. Appropriations provide most of IRS's operating budget. In FY2019, 93% ($11,302 million) ofits operating budget came from appropriations. The remaining 7% ($817 million) consistedof(1)reimbursementsfromother government agencies for services rendered by the IRS, (2) offsetting collections, (3) user fees, and (4) carryovers of unobligatedbalances fromprevious years. Current law gives the IRS unrestricted control over how nonappropriated funds are used. Historically, IRS appropriations have been distributed among four accounts: taxpayer services (TS), enforcement (ENF), operations support (OS), and business systems modernization (BSM). As Table 1 shows, enforcement accounted for 43.5% of the $11,511 million in enacted appropriations for FY2020, followed by OS (33%), TS (22%), and BSM (1%). The Trump Administration requested $12,039 million in IRS appropriations for FY2021, or $528 million (4.6%) more than the enacted amount for FY2020. Relative to FY2020, funding for OS would have risen by $196 million (7.8%), for BSM by $120 million (66.7%), forENF by $61 million (1.2%), and for TS by $51 million (2%). The Administration also proposed to s upplement funding for reducing the federaltaxgap by asking Congress to exempt $400 million of the proposed budget ($280 million for ENF and $120 million for OS) from the FY2021 caps on nondefense discretionary spending under the Budget ControlAct of2011 (BCA; P.L. 112-25, as amended). The requested exemption is known as a programintegrity cap adjustment. It allows Congress andtheAdministration to increase congressional allocations of annual appropriations for particular purposes. These purposes include activities to maintain programintegrity, such as boosting a program's effectiveness by enforcing compliance with its regulations. According to budget documents, the proposed $400 million cap adjustment in FY2021, together with proposed annual cap adjustments through FY2030, would have resulted in a net revenue gain of $64 billion in that period. This estimate did not consider the potential revenue gain fromthe deterrent effect fromincreased enforcement. The FY2021 budget proposal included $106.4 million to implement changes in IRS operations mandated by the Taxpayer First Act (P.L. 116-25). Among the changes are creating an internet platformfor filing Form 1099s, moving to 100% e-filing by tax-exempt entities, and developing uniforms tandards for electronic signatures. The 116th Congress approved the Consolidated Appropriations Act, 2021 (H.R. 133, P.L. 116-260), which provides $11,919 million in appropriations for the IRS. This amount is 3.5% larger than the enacted amountfor FY2020 and 1% less thanthe budget request. Table I. IRS's FY2020 and FY202 I Appropriations, Excluding Nonappropriated Funds (millions of dollars) FY2020 FY2021 FY2021 Account Enacted Request Enacted Taxpayer $2,512 $2,563 $2,556 Services Enforcement 5,010 5,071 5,213 Operations 3,809 4,105 3,928 Support Business 180 300 223 Systems Modernization Total $11,511 $12,039a $11,919 Sources: IRS's FY2021 Budgetjustification and Consolidated Appropriations Act, 2021 (P.L. 1 16-260). a. Excludes $400 million in Program Integrity Initiatives underthe ENF and OS accounts. Specific Appropriations Accounts Taxpayer Services (TS) This account covers thecost of printing forms and publications, processing returns, filing and account services, and taxpayer assistance fromthe Taxpayer Advocate Service (TAS). The Administration askedfor $2,563 million in FY2021 for TS, or $51 million more than the enacted amountfor FY2020. Of this amount, $11 million was set aside for the Tax Counseling for the Elderly Program, $12 million for low-income taxpayer clinic grants, $25 million (available through the end of FY2022) for matching grants in the https://crs repc

What Is HeinOnline?

HeinOnline is a subscription-based resource containing thousands of academic and legal journals from inception; complete coverage of government documents such as U.S. Statutes at Large, U.S. Code, Federal Register, Code of Federal Regulations, U.S. Reports, and much more. Documents are image-based, fully searchable PDFs with the authority of print combined with the accessibility of a user-friendly and powerful database. For more information, request a quote or trial for your organization below.



Short-term subscription options include 24 hours, 48 hours, or 1 week to HeinOnline.

Purchase Access

Already a HeinOnline Subscriber?

Log In

profiles profiles most