Jorge Castro Comments on Whether Congress Will Increase the IRS Budget in Bloomberg Law
"Biden Would Get Requested IRS Boost Under House Funding Bill"
Tax Member Jorge Castro, former Democratic Congressional tax aide and Counselor to the IRS Commissioner during the Obama Administration, commented on legislation released today by the House Appropriations Committee, which includes $13.2 billion in baseline IRS funding for fiscal 2022. The bill also includes $417 million for the IRS requested by the Biden Administration to increase tax collections and reduce the tax gap—the difference between what taxpayers owe and what they actually pay on time. That brings the total level of funding for IRS to about $13.6 billion, a $1.7 billion increase from 2021. Castro noted that there is recognition in Congress that the IRS has been working overtime during the pandemic, which has put pressure on the agency. Providing the IRS with additional resources so that it is better-equipped to audit and collect money from corporations and the wealthy is a key component of the Administration's plan to pay for new spending for infrastructure and social programs.
In total, Biden wants to increase the IRS's budget by nearly $80 billion over 10 years—$72.5 billion in mandatory funding plus a "program integrity" allocation of $6.7 billion. Some Republican lawmakers have already questioned the Administration's IRS funding request, particularly the mandatory stream of funding over the next decade. Still, there is a possibility of some Republican support for increased IRS funding. A bipartisan group of Senators who are negotiating a narrow infrastructure deal are examining an increase in IRS funding as a means to ramp up enforcement and pay for some of the costs of such deal. "There is also growing bipartisan recognition for the IRS to address the tax gap, which has been grown significantly. In the end I think the Senate will – at the Administration's urging – increase the IRS's budget in order to achieve Congress's objective," Castro said.