As part of a deal to increase the debt ceiling and prevent the first-ever federal default, the IRS is facing significant cuts to funds intended to rebuild its personnel and update its outdated Computer systems over the next ten years.
In exchange for increasing the debt ceiling through January 2025, the White House and congressional Republicans came to a final agreement Sunday night to restrict government spending for the following two fiscal years.
IRS Faces Funding Cuts as Debt Ceiling Agreement
To prevent a government default, Congress still needs to approve the budget agreement by June 5.
According to the Treasury Department, it is roughly how long it will take to make regular payments without having to borrow more money.
The Biden administration and House Speaker Kevin McCarthy (R-Calif.) reached a spending agreement that would keep non-defense discretionary spending essentially unchanged in fiscal 2024 and restrict growth to 1% in FY 2025.
The Fiscal Responsibility Act of 2023 is the legislation that achieves the necessary debt ceiling compromise.
McCarthy added that, at just 150 pages, it wouldn’t be required to read it cover to cover to find out what was inside.
Yet, aside from such one-liners, there will certainly be confusion around the IRS for some time to come.
It will cancel $1.39 billion in IRS funding that was approved as part of the Inflation Reduction Act when it comes to the IRS.
Read more: New Deadline Announced: US Debt Ceiling Negotiations To Persist Until June 5th
Republicans Seek to Block Funding
Not much of a cut, but during 2024 and 2025, an additional $20 billion in appropriations funds for the IRS is intended to be redistributed.
So, the overall reduction in the IRS budget now exceeds $21 billion. McCarthy has come under fire from inside his own party for first declaring that he anticipated reducing IRS funding by $1.8 billion, even though conservative Republicans had sought to cut it far more drastically.
Conservative Republicans have called on McCarthy to prevent the employment of the 87,000 new IRS agents, prompting numerous one-liners to emerge.
Speaker McCarthy asserted that his agreement would save more than $1 billion from being wasted on employing Biden’s new army of IRS officers when it became necessary to make concessions to the White House.
The limit, Save, Grow Act of 2023 (H.R. 2811) by the Republicans attempted to remove funding for 87,000 additional IRS agents.
The IRS was expecting special funds of $79 billion, but the measure would have recovered $71 billion of that amount.
Read more: Key Witness Emerges: Mar-A-Lago Employee Unveils Crucial Details In Trump Documents Case
