A bill introduced in the House of Representatives on June 5 could have significant implications for IRS enforcement efforts. The bill (not yet numbered) was proposed by Congresswoman Emerson of the Committee of Appropriations; it allocates $11.8 billion to the Internal Revenue Service. The $11.8 billion amount is the same funding that the IRS received in 2012; of that amount, $5.3 billion would be devoted to tax enforcement. The House bill stands in contrast to the $12.8 billion in funding proposed by President Obama, with a $5.72 billion set-aside for enforcement.
IRS funding, particularly amounts devoted to enforcement, directly impacts the Service’s ability to detect noncompliance with the tax code and conduct audits. A higher level of funding would allow the Service to hire more examiners to conduct audits, as well as appeals agents to settle disputes. Political wrangling over IRS funding will assuredly continue, and – regardless of the ultimate budget – so will comprehensive enforcement of the tax code, but the resources devoted to enforcement can have a significant impact on whether and how taxpayers interface with the Service.