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

1 1 (August 17, 2022)

handle is hein.crs/goveief0001 and id is 1 raw text is: a Congressional Research Service informing the legislative debate since 1914 Updated August 17, 2022 Internal Revenue Service Appropriations, FY2023 Overview of the IRS Budget The Internal Revenue Service (IRS) has two primary responsibilities: (1) collecting most of the revenue to fund federal government agencies and programs, and (2) enforcing taxpayer compliance with federal tax laws through taxpayer services and activities like audits. In FY2021, the agency processed 269 million tax returns and collected $4.1 trillion in gross revenue and $75 billion in enforcement revenue. The IRS's operating budget is a blend of annual appropriations and miscellaneous resources. In FY2021, 90.5% ($11.92 billion) of its operating budget came from appropriations. The remaining 9.5% ($1.25 billion) consisted of (1) reimbursements from other government agencies for IRS-provided services, (2) offsetting collections, (3) user fees, and (4) carryovers of unobligated balances from previous fiscal years. Congress gives the IRS considerable leeway in how it uses nonappropriated funds. 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 has been the largest of the four in recent years, accounting for 43.2% of FY2022 enacted appropriations. OS was the second-largest account at 32.6%, followed by TS at 21.1% and BSM at 2.2%. Overview of the IRS's FY2023 Budget Request The Biden Administration is requesting $14.1 billion in IRS appropriations for FY2023, nearly 11.0% more than the FY2022 enacted amount. Requested funding for each of the four appropriations accounts is also larger. Relative to FY2022, TS funding is 21.8% greater, ENF funding 7.8% greater, OS funding 10.8% greater, and BSM funding 12.7% greater. Including an estimated $1.1 billion in miscellaneous resources, the IRS's FY2023 operating budget would total $15.2 billion. In a departure from standard practice, the budget request adjusts the requested amounts for TS and ENF for employee support costs. The adjustment would reduce requested OS FY2023 funding by $709 million and transfer that amount to TS ($299 million) and ENF ($411 million) to better reflect the actual employment cost for TS and ENF functions. This cost encompasses employee compensation, hiring and training costs, and the information technology and physical space needed to make an employee productive. The budget request calls for an internal reimbursable agreement process to implement the proposed adjustments in FY2023. The budget request also designates $320 million for implementing the Taxpayer First Act (P.L. 116-250) provisions. In general, the provisions are intended to codify and strengthen taxpayer rights and to make the IRS more taxpayer-friendly by bolstering its cybersecurity, adopting more advanced technologies, and developing a comprehensive taxpayer service strategy. Funding for this purpose would come from three accounts: TS ($119 million), ENF ($54 million), and OS ($147 million). Another $10 million would go to a Mississippi Delta region hiring initiative, as part of a strategy to reach out to underserved communities. Action in the House and the Senate In July, the House passed a bill (H.R. 8294) that would provide $13.6 billion in FY2023 appropriations for the IRS, which is $1 billion more than the enacted amount for FY2022 and $506 million less than the budget request. Also in July, the Senate Appropriations Committee released the text of a bill for FY2023 appropriations for financial services and general government. The bill recommended $13.6 billion in IRS appropriations. Table I. IRS's FY2022 and FY2023 Appropriations, Excluding Nonappropriated Funds (billions of dollars) FY2022 FY2023 FY2023 FY2023 Account Enacted Request Housea Senateb TS $2.781 $3.386 $3.411 $3.444 ENF $5.438 $5.862 $6.120 $6.162 OS $4.101 $4.543 $3.754 $3.678 BSM $0.275 $0.310 $0.310 $0.310 Total $12.595c $14.100 $13.595 $13.595 Sources: IRS's FY2023 Budget Justification and Consolidated Appropriations Act, 2022 (P.L. 117-103), H.R. 8294, Senate Appropriations Committee bill for financial services and general government FY2023 appropriations. Notes: a. H.R. 8294 as passed by the House on July 20, 2022. b. Senate Appropriations Committee's explanatory statement on its FY2023 financial services and general government appropriations bill. c. This figure does not include any of the funds the IRS received from Congress to implement pandemic-related tax benefits, which totaled $3.1 billion when they were enacted. The supplemental funds came from P.L. 116-136, P.L. 116-260, and P.L. 117-2.

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