During last week’s negotiations to avert a government shutdown, Congress quietly slashed $20 billion from the Internal Revenue Service.
Republicans have long targeted the tax agency, and their cuts will hurt its efforts to go after rich tax evaders and improve the IRS’s functionality. It’s their second successful cut from President Biden’s $80 billion funding boost to the agency in the 2022 Inflation Reduction Act, as the GOP took away an earlier $20 billion in a 2023 budget deal.
The latest cuts to the IRS will come automatically thanks to the 2023 deal, as the language was repeated in last week’s bill. The Biden administration said the cuts would end up adding $140 billion to the national debt, as they hurt the tax agency’s ability to audit big corporations and the wealthy.
Specifically, the White House said, the IRS will conduct 400 fewer major business audits each year, and 1,200 fewer audits of rich individuals. Customer services for taxpayers will also be hurt, according to Deputy Treasury Secretary Wally Adeyemo. Last month, he warned that by 2026, the IRS will only have the resources to answer two of every 10 phone calls to its helplines, with wait times increasing to an average of 28 minutes.
The Inflation Reduction Act’s boost to the tax agency helped relieve a long backlog of tax filings, and created a well-liked free tax filing pilot program. All of that is on the chopping block now, fitting in with Donald Trump and Republicans’ plans to weaken the IRS. The president-elect plans to appoint anti-tax extremist Billy Long to take over the agency next year, who repeatedly tried to abolish the IRS as a member of Congress.
These cuts combined with Long’s planned appointment mean that tax season next year will almost certainly result in headaches for the average taxpayer and windfalls for the wealthy and powerful. A ballooning national debt is also on the horizon. The question is whether Trump and the GOP will be able to get away with all of it.
