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House appropriations panel OKs $13.6 billion for IRS in FY23

June 26, 2022
Hand holding US money in front of US flag_pexels-karolina-grabowska-4386425-1

The IRS is getting a bit more from this in the House Appropriations Committee’s fiscal year 2023 proposal. (Photo by Karolina Grabowska)

The tax world, both professionals and regular Jane and Jim Taxpayers, continue to criticize how the Internal Revenue Service does, or doesn’t do, its job.

Yes, we’re looking at lacking telephone assistance and the millions of still unprocessed tax returns.

The IRS generally responds by noting the challenges it faces, primarily budgetary. The lack of adequate funding, say agency officials, leads to other problems, notably staffing shortages.

And yes, that’s complicated how the IRS handles telephone assistance duties and the millions of still unprocessed tax returns.

Rather than pick a side or go all tax both-sides here, on this By the Numbers Sunday, I’m looking at the figures.

Showing the IRS the money: House Democrats on the Appropriations Committee are calling for $13.6 billion for the IRS in fiscal year 2023, which begins this coming Oct. 1.

That’s a $1 billion more than the tax agency’s current funding level.

And while that’s less than President Joe Biden asked for in his FY23 budget, if the hike is approved, it will be the fourth consecutive year that the IRS has received more money than in the prior fiscal year.

So which of all those figures get By the Numbers honors this week? I’m going with the total IRS budget proposal of $13.6 billion.

IRS FY23 allocations: Overall, the $29.8 billion proposed in the coming fiscal year for Financial Services and General Government, of which the IRS is a part, is $4.3 billion more, or a 17 percent increase, over fiscal year 2022.

The FY23 funding bill approved on June 24 by the Appropriations panel calls for the $13.6 billion allocated to the IRS to be spread across agency in the following ways —

  • $3.4 billion, an increase of $630 million above the FY 2022 enacted level, for Taxpayer Services. This total includes support for the Volunteer Income Tax Assistance Matching Grants Program, Low Income Taxpayer Clinic, the Taxpayer Advocate, Tax Counseling for the Elderly, and increased personnel to improve IRS customer service.
  • $6.1 billion, an increase of $682 million, above the FY 2022 enacted level, for Enforcement. These funds support increased enforcement efforts and additional essential personnel.
  • $3.8 billion, for IRS overhead functions for Operations Support.
  • $310 million, an increase of $35 million above the FY 2022 enacted level, for Business Systems Modernization. This will help modernize IRS legacy systems, as well as improve IRS Web applications and tax filing processing.

Good for the bulk of the FY23 amount going to the area that includes IRS customer service. But I’d like to see a bit more head to the computer upgrades, primarily to help get the agency back up to speed on return processing.

Months until the money: Will the IRS get the $13.6 billion for the next fiscal year? There’s no guarantee, thanks to the slim margins by which Democrats hold the House and Senate.

There’s also three+ months — until Sept. 30 — before the fiscal year appropriations have to be approved, and Congress tends to wait until the last minute. Or they go past deadlines and keep the government running with short-term continuing resolutions, giving them more time on Capitol Hill to hammer out federal fiscal budgets.

During this time, there will be some give and take. But since it is an election year, Representatives and Senators will be more interested in meeting deadlines and heading out of Washington, D.C., to their campaign trails.

And the aforementioned inadequate telephone assistance and tax returns backlog likely will make good negotiating points for the Democrats who want to supply the IRS with more money.

You also might find these items of interest:

 

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TAX-SAVVY WAYS 
TO WRAP UP 2026

It’s over! With October’s extended filing deadline behind us, it is now time to focus on year-end moves to reduce your 2026 tax bill. 

You’ll find ways to do just that on the Tax Tips page (see the More Tax Posts drop-down menu at the top of the blog), as well as the separate tax tip pages for each month, notably October through December. If you’re on the Tax Tips page, you’ll find a monthly list at the end of this column. If you’re on another blog page, you can head straight to the October tips; at the bottom of that tips page you’ll find links to all the other 11 months’ collections of tax advice.

Not to spoil what you’ll find in that tax advice, but it does cover such things as tax deductions for charitable donations, investment moves that could reduce tax due, and ways to max out your tax-favored retirement savings. 

Finally, as the year winds down, things get hectic. There are lots of other things to occupy our time, like the much more fun upcoming holidays. But don’t lose sight of taxes, since timing is key. To be of use, most tax moves must be made by the end of the tax year. That’s Thursday, Dec. 31, which also is the last business day of the year. 

So that you don’t miss that final tax year deadline, also keep an eye on the countdown clock below. It will keep you on top of just how much time is left to make important, tax-saving moves. (Note: I’m in the Central Time Zone, so adjust accordingly for where you live.)

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