House Republicans, now led by new Majority House Speaker Kevin McCarthy, want to defund the Internal Revenue Service (IRS), and used their first vote to cut back more than $70 billion, or nearly 90 percent, of new funding to the tax agency.
The House voted 221-210 for the measure, which is sure to be shot down in the Senate by the Democrats.
In case the legislation somehow gets passed in the Senate, President Biden has voted to take action.
“With their first economic legislation of the new Congress, House Republicans are making clear that their top economic priority is to allow the rich and multi-billion dollar corporations to skip out on their taxes, while making life harder for ordinary, middle-class families that pay the taxes they owe,” the Office of Management and Budget said in a statement promising a veto by President Joe Biden, Politico reported.
Here are five things to know.
Under the Democratic-backed Inflation Reduction Act $80 billion in new funding is provided to the IRS over 10 years in an effort to boost a wide range of agency functions, including customer service, taxpayer assistance and criminal investigations, Political reported.
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The bill didn’t address inflation, gas prices, or immigration, but focused instead on the IRS.
According to Speaker McCarthy, addressing the IRS funding had been a GOP promise.
Rep. Adrian Smith (R-NE) argued the boosted funding for the IRS is “part of the broad Biden administration strategy to tax and audit exponentially more Americans.” He added that the Republican bill would “stops autopilot funding for an out-of-control government agency that is perhaps most in need of reform.”
The GOP complaints about IRS funding go back to President Barack Obama’s administration, when the Republicans argued the IRS targeted the tax-exempt status of conservative political groups. Speaker McCarthy also claims the increase in IRS funding money will lead to a boost of 87,000 new IRS agents “who will then turn and harass everyday Americans,” Yahoo reported.
The viral claims are “absolutely false,” Rettig wrote at the time, adding his agency “is often perceived as an easy target for mischaracterizations,” but he promised the new money will not lead to increased audit scrutiny on households making under $400,000.
The funding for the IRS has already been earmarked, according to reports. Much of the money is set to chase down wealthy tax cheats. IRS estimates the “tax gap” — the difference between what taxes are owed to the government and what is actually paid — is hundreds of billions of dollars annually, Yahoo reported.
The new funding would allow the IRS to hire an estimated 86,852 new employees, according to a May 2021 report by the Department of Treasury, but many of those would not be agents. A large number of the new workers would work in other areas like information technology.
And, unlike viral rumors, nearly all new agents would be unarmed, Yahoo reported.
House Speaker Kevin McCarthy of Calif., walks to a House Republican Steering Committee meeting on Capitol Hill in Washington, Jan. 11, 2023. (AP Photo/Patrick Semansky)