The Truth About New IRS Funding

Have you or someone that you know complained about being on hold “forever” when calling the IRS or experiencing the hassle of correcting a tax error? Well, you might want to keep that pain in mind when you read that the 118th Congress opened 2023 with a bill to roll back the $80 million in new IRS funding that was passed as a part of the Inflation Reduction Act of 2022.

Some politicians apparently want to quickly fulfill, or make a gesture to fulfill, a campaign promise to prevent the IRS from getting additional funding. Their stated goal? To save ordinary taxpayers from nuisance audits by all of the additional IRS agents that will be hired with those additional funds. The real plan for that $80 million? Investing in IRS systems and services.

The irony is that the IRS, part of the Department of the Treasury, is vested with administering the tax laws that are passed by Congress. Sure, IRS responsibilities include compliance oversight of the tax law to make sure the government collects funds to pay for the federal budget, also passed by Congress. 

But the IRS does a lot more. They maintain the systems, operations, and staff necessary to provide forms, instructions, taxpayer assistance, and all of the other resources needed for annually processing 261 million tax returns, collecting $4.1 trillion in tax revenue, and issuing 600.1 million refunds totaling more than $1.1 trillion (per the 2021 IRS Data Book 

No small task.

Even with its existing annual budget of approximately $14 billion, IRS systems are outdated. Its workforce capacity is stretched, especially after the impacts from COVID. Its staff is aging, many nearing retirement. Funding from the Inflation Reduction Act of 2022 will be targeted to invest in services and technology to make tax filing easier for you. But it won’t happen overnight – this is a 10-year plan to finally bring the IRS into the 21st century.

Bottom line, if you want quicker call response and issue resolution from the IRS, not to mention user-friendly systems, get behind the approximately $80 million in new IRS funding that was passed as a provision of the Inflation Reduction Act of 2022. Like any other business or operation, the IRS needs long term investment to sustain itself.

Want to know more about how the IRS is funded and where its budget goes? It’s all here at