The Internal Revenue Service (IRS) plays a fundamental role in our system of government — helping taxpayers comply with the tax code, ensuring that the tax laws are enforced fairly and credibly, and collecting nearly all of the revenue that funds federal programs from defense to the safety net, roads, scientific research, and education. While policymakers should give the IRS the resources each year to do its job, they’ve fallen short in recent years.
In fact, since 2010, lawmakers have deliberately targeted the agency with severe budget cuts. Last year’s budget bill provided a modest — but far from adequate — funding increase. Yet even with it, IRS funding is still 17 percent below 2010 levels after accounting for inflation. In particular, policymakers have gutted enforcement funding, making it easier for tax cheats to escape audits. All of these cuts came in the context of a rising number of tax returns to process (see chart), new legislative mandates, and the growing threat of identity theft.
It’s essential that lawmakers take a more meaningful step this year to restore IRS funding.