Congress stymies IRS enforcement ambitions

Lawmakers enacted a continuing resolution in December that keeps the government funded through March 15, 2025, and freezes $20 billion of the enforcement funding provided under the Inflation Reduction Act in 2022. This comes after approximately $20 billion was rescinded in an earlier government funding deal in 2023.

The IRA initially gave the IRS $80 billion in special funding, with $46 billion for dedicated to enforcement. Since then, $20 billion of the enforcement funding has been rescinded, with an additional $20 billion now frozen under the latest CR. Although the second $20 billion in funds have not been officially rescinded, Republicans could easily keep them frozen in future spending agreements or rescind them altogether.

The move stymies IRS efforts to dramatically increase enforcement activity over the next several years, with more than $40 billion of the original $46 billion in enforcement funds now unavailable, and Republicans have stated they plan to rescind much if not all of the frozen and otherwise remaining funds made available to the agency by the IRA.

The IRS may significantly shift priorities under the new administration, particularly if former Rep. Billy Long, R-Mo., is confirmed as the new IRS commissioner.

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