As Congress considers legislation to extend government funding, a coalition of national and state organizations are advocating to protect funding for the Internal Revenue Service (IRS).  

The coalition has outlined three key requests in a letter addressed to Congress organized by Americans for Tax Fairness: 

1. Enact FY25 funding levels for the Internal Revenue Service (IRS) based on the Senate’s bipartisan FY2025 Financial Services and General Government (FSGG) Appropriations bill.
2. Reject any additional recissions to IRS enforcement funding below what was included in the Inflation Reduction Act and ensure that all taxpayers are paying their full obligations due under law.
3. Oppose harmful poison pill riders such as the House rider blocking the popular and effective Direct File program.

The letter highlights the substantial progress achieved due to investments in rebuilding the IRS, citing the following improvements:

• The IRS is devoting new resources to increasing tax collections from high-income tax evaders. The IRS has collected over $1 billion in past-due taxes from millionaires and is using new tools to identify large partnerships to audit, such as hedge funds and real estate firms, after years of auditing high-income partnerships at near-zero rates. Estimates suggest that every $1 spent auditing high-income individuals means more than $12 in additional tax revenue. This is particularly relevant given the current push to prevent cuts to IRS funding in the end-of-year government funding bill.

• The IRS is now answering taxpayer calls as it should, clearing backlogs, and transmitting timelier tax refunds. The agency answered nearly 90 percent of calls during the 2024 filing season (a vast improvement from 18 percent in 2022). Average wait times dropped from 29 to 4 minutes.

• This past filing season, the IRS conducted a Direct File pilot program that allowed taxpayers in 12 states to file their taxes online for free without commercial tax preparers, saving working families hundreds of dollars. Data released by the IRS on April 26 further confirms that the pilot was an incredible success with a 90 percent satisfaction rate. When fully phased in, the program is estimated to save Americans $11 billion annually in filing and time costs and could deliver $12 billion more in currently unclaimed tax credits for low-income families.

Signers also urge Congress to reject the House’s partisan FY2025 FSGG proposal, stating that it would “slash the IRS’s regular annual funding beyond levels agreed to in the Fiscal Responsibility Act, reducing it to levels not seen since the early 2000s.”

The letter continues by stating that if Congress cannot agree on a full year funding plan by the December 20th deadline and considers another short-term continuing resolution, they “must act to include language to prevent the continued freeze of IRS’s Enforcement account created through the Inflation Reduction Act, effectively rescinding available enforcement funding. This language is necessary to maintain the bipartisan agreements made in the Fiscal Responsibility Act of 2023.”  In budget-speak, adding such language in a short-term spending bill is called an “anomaly,” without which, IRS spending would be dramatically cut.

“Without the anomaly, these balances would be precluded from obligation during the period of the CR. Further rescissions of the IRS’s Enforcement funding would undermine collection of tax revenue and enforcement of the tax laws,” the letter concludes.

CHN continues to work with our partners for a fair tax code – and adequate funding for tax enforcement — that raises adequate revenues to invest in human needs. You can view the letter and its signers here.