House Republicans vote to cut supplemental IRS funding

WASHINGTON — House Republicans they began their work in the majority on Monday by passing a bill that would rescind nearly $71 billion that Congress gave the IRS in fulfillment of a campaign promise, even though the legislation is unlikely to go any further.

Democrats have strengthened the IRS over the next decade to offset spending on the top health and environmental priorities they passed last year and to replenish an agency struggling to provide basic services to taxpayers and ensure fairness in tax enforcement.

The money exceeds what Congress gives the IRS each year through the appropriations process, and in the fall immediately became a magnet for Republican campaign ads that argued the increase would lead to an army of IRS agents to go after hardworking Americans.

The bill to repeal the money passed the House on a party-line vote of 221-210. The Democratic-controlled Senate has vowed to ignore it.

Shortly before the vote, the nonpartisan Congressional Budget Office projected that eliminating supplemental funding for the IRS would increase the deficit by more than $114 billion over the next decade. That created an awkward moment for Republicans, who have said eliminating the deficit will be one of their top concerns in the majority. It was an early example of how the GOP’s bold campaign promises can become tangled in the messy reality of governance.

Still, the CBO forecast didn’t dampen Republican support. Rep. Jeff Duncan, R-S.C., said the additional IRS funding that Democrats gave last year was for one purpose.

“To go after small businesses, hard-working Americans, to try to raise money for reckless spending, reckless spending that has put this country $31 trillion in debt,” Duncan said.

Duncan and other GOP lawmakers routinely say the extra funding will be used to hire 87,000 new agents to fight Americans, but that misleading. The number is based on the Treasury Department’s plan, which says many IRS employees will be hired over the next decade when the money is released. But not all of those employees will be hired at the same time, not all of them will be auditors, and many of them will replace about 50,000 employees who are expected to quit or retire in the coming years.

“This tax debate may be the most dishonest, demagogic rhetoric I’ve ever seen in Congress,” said Rep. Steny Hoyer, D-Maryland.

Charles Rettig, a former IRS commissioner, said in his final message to the agency in November that the additional money would help in many areas, not just to strengthen the tax authorities. He said the investment would make it “even less likely for honest taxpayers to hear from the IRS or receive an audit letter.”

Additional funding for the agency has been politically contentious since 2013, when the IRS under the Obama administration was found to have used inappropriate criteria to vet Tea Party groups and other organizations applying for tax exemptions.

In the years that followed, the IRS largely lost the battle for congressional funding, even though a follow-up report in 2017 found that both conservative and liberal groups had been selected for oversight.

Rettig told lawmakers in April that the agency’s budget had fallen by more than 15% over the past decade, adjusted for inflation, and said the number of full-time employees — 79,000 last fiscal year — was close to 1974 levels.

But Rep. Nicole Malliotakis and other Republicans did not buy the argument that the funding would go to audit the wealthy.

“It’s designed to check, check and harass America’s small businesses and families, who they know can’t afford the legal costs to fight this army,” Maliotakis said.

Sen. Ron Wyden, the Democratic chairman of the Senate Finance Committee, said a decade of budget cuts under Republican leadership had destroyed the IRS.

“The only way House Republicans can make it more obvious that they’re doing a favor to the rich tax cheats is to come out and say it in those exact words,” Wyden said. »

And the White House has said President Joe Biden will veto the bill if it reaches his desk, saying the richest 1% of Americans hide about 20% of their income so they don’t have to pay taxes on it, shifting most of the tax bill. burden on the middle class.

“With their first economic legislation of the new Congress, House Republicans are making it clear that their top economic priority is to allow wealthy and multibillion-dollar corporations to avoid paying taxes while making life harder for ordinary middle-class families. pay the taxes they owe,” the White House said.