Congress should maintain IRS funding for both service and technology, according to a Taxpayer Advocate.

• Erin Collins, the National Taxpayer Advocate, has urged Congress to maintain IRS funding for taxpayer service and technology in the face of Republican scrutiny.
• Nearly $80 billion was initially allocated for the agency under the Inflation Reduction Act of 2022, but over $70 billion has already been revoked.
• With Republican control of both Congress and the White House, there is a higher risk of losing more IRS funding.

The IRS's internal watchdog has urged Congress to maintain funding for taxpayer service and technology.

The National Taxpayer Advocate released its annual report to Congress, criticizing the "disproportionate allocation of funds" in the Inflation Reduction Act.

There has been strong bipartisan support for taxpayer services and technology modernization, despite controversy surrounding the tens of billions earmarked for enforcement, according to Erin Collins, national taxpayer advocate.

In 2025, your paycheck may increase due to changes in tax brackets.

The report indicates that the $78.9 billion Inflation Reduction Act funding was allocated 58% for enforcement and 32% for operations support, while only 4% was allocated for taxpayer service and 6% for technology modernization.

Collins wrote that with adequate funding for services and technology, taxpayer experiences will be more equitable and efficient, resulting in increased compliance and reduced need for costly backend enforcement.

In fiscal year 2024, the IRS collected $98.7 billion through enforcement, which was less than 2% of all revenue, according to the agency's 2024 financial report. The remaining 98% of federal taxes were "self-assessed" via annual tax returns and timely payments.

Collins wrote that if Congress reduces enforcement funding, it should not make corresponding cuts to taxpayer services and technology, as this could unintentionally eliminate the benefits of the services and technology.

The IRS has had to allocate part of its multi-year funding to maintain current operations due to the added costs of pulling itself out of the pandemic and yearly appropriations remaining steady amid rising costs over the past few years, she stated.

The 2023 budget deal saw Congress rescind $20 billion in IRS funding, with Republicans pledging to make additional cuts. An additional $20 billion was automatically clawed back when lawmakers extended the 2023 deal to prevent a government shutdown in December.

If the Republicans gain control of both Congress and the White House in 2025, further IRS funding cuts could occur.