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

1 1 (April 29, 2024)

handle is hein.crs/govepab0001 and id is 1 raw text is: Congressionol Research Service nforming the IegisI9tive debate since 1914 6 April 29, 2024 Internal Revenue Service Appropriations, FY2025 Overview of the RS Budget The Internal Revenue Service (IRS) is responsible for (1) collecting most of the revenue to fund federal government agencies and programs, and (2) enforcing taxpayer compliance with federal tax laws through activities like taxpayer assistance and audits. In FY2023, the agency processed nearly 272 million tax returns and related forms, collected $4.7 trillion in gross revenue, and issued $659 billion in refunds. The IRS's operating budget is a mix of annual appropriations and other resources. In FY2024, appropriations accounted for 58% ($12.3 billion) of the $21.0 billion IRS budget. The remaining 42% ($8.6 billion) came from unobligated balances from previous years, reimbursable items, user fees, and $7.3 billion of the $79 billion in mandatory funding provided by P.L. 117-169 (also referred to as the Inflation Reduction Act, or IRA; see below for more details on the IRA's impact on IRS funding). The IRS has considerable leeway in how it uses these other resources. IRS appropriations are distributed among four accounts: taxpayer services, enforcement, operations support, and business systems modernization (BSM). As Table 1 shows, enforcement is the largest of the four in FY2024, accounting for 44% of enacted appropriations. Table I. Enacted FY2023 and FY2024 and Requested FY2025 IRS Appropriations (billions of dollars) FY2023 FY2024 FY2025 Account Enacted Enacted Request Taxpayer $2.78 $2.78 $2.78 Services Enforcement $5.44 $5.44 $5.44 Operations $4.10 $4.10 $4.10 Support Business $0.00 $0.00 $0.00 Systems Modernization Totals $12.32 $12.32 $12.32 Sources: IRS's FY2025 Budget justification; and Further Consolidated Appropriations Act, 2024 (P.L. 118-47). Note: a. These amounts do not include any of the $79 billion in IRA funding or the $21.6 billion in rescissions of those funds since IRA was enacted. Inflaton Reduction Act The IRA provided the IRS with $78.9 billion in mandatory funding that is available for obligation from FY2022 to FY2031. This marked the first time Congress provided the IRS with multiyear funding. The act specified that $45.6 billion of this amount will go to enforcement, $25.3 billion to operations support, $4.8 billion to BSM, and $3.2 billion to taxpayer services. Funds designated for one purpose (e.g., taxpayer services) cannot be used for a different purpose (e.g., enforcement). By the end of calendar-year 2023, the IRS had expended $4.4 billion in IRA funds; of that amount, $1.1 billion was for taxpayer services, nearly $0.5 billion for enforcement, $1.8 billion for operations support, and $1.0 billion for BSM. Nearly $2.0 billion of expended IRA funds were used to pay for FY2023 operating costs and inflation adjustments not covered by enacted appropriations. Congress rescinded $1.4 billion in unobligated IRA enforcement funding in the Fiscal Responsibility Act of 2023 (P.L. 118-5). Another $20.2 billion in IRA money was rescinded in the law (P.L. 118-47) providing FY2024 IRS appropriations. The two rescissions have reduced the amount of IRA funds available to the IRS in FY2024 to about $57 billion, including funds already expended. In April 2023, the IRS released a 10-year strategic operating plan (SOP) intended to guide the use of IRA funds to reach the following goals: (1) improve taxpayer services to help taxpayers meet their tax obligations and receive the tax benefits for which they are eligible; (2) quickly resolve taxpayer issues; (3) reduce the federal tax gap by boosting examinations of tax compliance by high- income persons and partnerships with complex returns; (4) deliver cutting-edge technology for the IRS's taxpayer services and enforcement initiatives; and (5) build and retain a highly skilled and diverse workforce. FY2025 udget Request The Biden Administration is requesting the same amount of IRS appropriations in FY2025 that were enacted for FY2023 and FY2024: $12.32 billion. Its request for each of the four appropriations accounts is also identical. But the proposed FY2025 IRS budget ($22.8 billion) would be nearly $2 billion larger, owing to an anticipated drawdown of $9.3 billion in IRA funds, which would be $2 billion more than the expected drawdown of $7.2 billion in FY2024. Taxpayer Services This account pays for prefiling assistance and education, filing and account services, taxpayer advocacy services, and associated support costs.

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