IRS Could Potentially Lose $20 Billion In ‘Enforcement Money’

U.S. Treasury officials are urging Congress to free up $20 billion in IRS enforcement funds before Joe Biden leaves office.

The funding is reportedly frozen due to being tied up in legislative language.

“The IRS is at risk of losing $20 billion in funding without legislative intervention,” the Associated Press stated.

The IRS losing $20 billion would not be a bad thing.

The funds should be returned to American taxpayers.

“This is not a bad thing,” Vivek Ramaswamy said.

This is not a bad thing. https://t.co/vXlaaiIlht

— Vivek Ramaswamy (@VivekGRamaswamy) November 27, 2024

From the Associated Press:

The $20 billion in question is separate from another $20 billion rescinded from the agency last year. However, the legislative mechanism keeping the government afloat inadvertently duplicated the one-time cut.

Treasury officials warn of dire consequences if the funding is effectively rescinded through inaction. The loss of that money would lead to an increase of the national deficit by $140 billion, Treasury Deputy Secretary Wally Adeyemo said on a call to reporters on Tuesday. There would be 6,000 fewer audits of wealthy individuals and 2,000 fewer audits of large corporations, and the agency would have to go on a hiring freeze, he said.

“The IRS is going to potentially have to make dramatic decisions about stopping hiring and starting to budget for a world which they don’t have $20 billion which will stop a lot of their progress,” Adeyemo said. ”If they don’t get that $20 billion that is at risk they would run out of enforcement money at the current pace sometime in fiscal year 2025.”

That’s just too bad.

Guess the IRS must stop hiring.

The IRS is at risk of losing $20 billion in funding without legislative intervention https://t.co/ToA5MX5JXE

— The Associated Press (@AP) November 27, 2024

U.S. Treasury officials are urging Congress to release $20 billion allocated for IRS enforcement before Trump takes power. https://t.co/nyCtQ0qEQy

— Newsweek (@Newsweek) November 27, 2024

Per Newsweek:

Maya MacGuineas, president of the Committee for a Responsible Federal Budget, echoed concerns about the broader consequences of cutting IRS funding. MacGuineas warned that reducing agency enforcement resources could significantly undermine efforts to curb the federal deficit, highlighting the critical role the IRS plays in revenue collection and fiscal responsibility.

“Given the fiscal situation we deeply hope there is no backsliding in the coming months and years with rescinding, diverting, repealing any of the revenue that is going effectively into the IRS to help with tax collection,” MacGuineas said.

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The IRS initially received an $80 billion funding boost through the Democrats’ Inflation Reduction Act to enhance its operations. However, much of that funding has since been clawed back.

A 2023 agreement between Republicans and the White House, aimed at addressing the debt ceiling and implementing budget cuts, resulted in $1.4 billion being rescinded from the agency. Additionally, $20 billion is set to be redirected over the next two years to support other non-defense programs.

This is a Guest Post from our friends over at 100 Percent Fed Up.

View the original article here.