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1 1 (July 29, 2020)

handle is hein.crs/govdbev0001 and id is 1 raw text is: IRS Appropriations, FY2021 The Internal Revenue Service (IRS) has two primary responsibilities: (1) to collect most of the revenueto 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 tax returns and 3.5 billion information returns, collected over $3.5 trillion in gross revenue, andis sued $452 billion in refunds. Appropriations provide the vast share of the IRS's budget. In FY2019, accordingto theagency's FY2021 budget request, 93% ($11,302 million) of its operating budget came from appropriations. The remaining 7% ($817 million) was from several other sources, including (1) reimbursements fromother government agencies for services renderedby theiRS, (2) offsetting collections, (3) user fees, and (4) carryovers ofunobligated balances from previous years. The IRS has unrestricted authority 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 (33.0%), TS (22%), and BSM (1%). The Trump Administration has requested $12,039 million in IRS appropriations for FY2021, or $528 million (4.6%) more than the enacted amount for FY2020. Relative to enacted amounts for FY2020, funding for OS would rise by $196 million (7.8%), for BSM by $120 million (66.7%), for ENF by $61 million (1.2%), and for taxpayer services by $51 million (2.0%). The Administration is also proposing to make more funding available for reducing the federal taxgap by asking Congress to exempt a total of $400 million of the proposed budget($280million forENF and $120 million forOS) fromthe FY2021 caps on nondefense discretionary spending under the Budget Control Act of2011 (BCA; P.L. 112-25, as amended). The requested exemption is known as a programintegrity cap adjustment. It permits Congress and the Administration to increase congressional allocations of annual appropriations for particular purposes. These purposes include activities to maintain programintegrity, such as efforts to improve a program's effectiveness by enforcing compliance with its regulations. According to budget documents, the proposed $400 million cap adjustnent in FY2021, together with proposed annual cap adjustments through FY2030, would result in a net revenue gain of $64 billion in that period. This estimate does not take into account the revenue gain fromthe deterrent effect on taxpayers fromincreas ed enforcement. The FY2021 budget proposalincludes $106.4 million to implement changes in IRS operations mandated by the Taxpayer First Act (P.L. 116-25). Among these changes ar creating an intemet platformfor filing Form 1099s, allowing 100% e-filing by tax-exempt entities, setting a comprehensive service and training strategy and developing uniforms tandards for accepting electronic signatures. Table I. IRS's FY2020 and FY2021 Appropriations, Excluding Nonappropriated Funds (millions of dollars) FY2020 FY202I FY202I Account Enacted Request H.R. 7668 Taxpayer $2,512 $2,563 $2,603 Services Enforcement 5,010 5,071 5,206 Operations 3,809 4,105 4,058 Support Business 180 300 250 Systems Modernization Total $11,511 $12,039a $12,117 Sources: IRS's FY2021 BudgetJustification and H.R. 7668. a. Excludes $400 million in Program Integrity Initiatives underthe ENFand OS accounts. Taxpyk.,r Skrvs This account covers the cost of printing forms and publications, processing returns, filing and account services, and taxpayer assistance fromthe Taxpayer Advocate Service (TAS). The Administration is asking for $2,563 million in FY2021 for TS, or $51 million more than the enacted amount for FY2020. Of this amount, $11 million would be set aside for the Tax Counseling for the Elderly Program, $12 million for low-income taxpayer clinic grants, and $25 million (available through the end of FY2022) for matching grants in the Conmunity Volunteer Income TaxAssistance program In addition, $209 million would go to the TAS. The budget request calls for areduction in full-time staffing within TS of 1,081 employees, which represents 91.4% of A A '2 July 29, 2020 y\

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