House Approves FY 2017 Financial Services Bill; IRS Budget Cut by $236 Million

CCH Tax Day Report

The House approved the Financial Services and General Government Appropriations Bill for the fiscal year (FY) 2017 (HR 5485) by a 239-to-185 vote late in the evening on July 7. The bill came to the floor with 70 amendments, creating a longer, two-day discussion that went past midnight the first day. The bill now heads to the Senate for consideration.

HR 5485 provides FY 2017 appropriations to the Department of the Treasury, including the IRS, as well as the Executive Office of the President, the judiciary, the District of Columbia, and several independent agencies. The bill provides $10.9-billion budget for the IRS for FY 2017 (TAXDAY, 2016/05/26, C.2), resulting in funding $236 million below its current budget, and $1.3 billion below the president’s request (TAXDAY, 2016/06/09, C.1). The House Appropriations Committee approved the bill during a full committee markup on June 9 (TAXDAY, 2016/06/10, C.1).

“The House today passed a bill that prioritizes funding where it will be best used, and makes policy reforms that improve efficiency and accountability and rein in executive overreach,” House Appropriations Committee Chairman Hal Rogers, R-Ky., said on July 7. If enacted, the bill would implement increased oversight and regulation of the IRS to ensure proper use of tax revenues, according to Rogers.

The measure contains a number of provisions to address GOP concerns of alleged IRS missteps. These include a prohibition on funds for the White House to order the IRS to determine the tax-exempt status of an organization and an extensive reporting requirement on IRS spending. Additionally, the bill prohibits a proposed regulation related to political activities and the tax-exempt status of Code Sec. 501(c)(4) organizations.

Possible Veto

The White House released a Statement of Administration Policy on June 21, strongly opposing the passage of HR 5485 (TAXDAY, 2016/06/27, C.2). “The bill’s reductions in funding for the Internal Revenue Service (IRS) exacerbate the damaging reductions inflicted on the IRS since 2010”, the Obama administration said. “If the president were presented with HR 5485, his senior advisors would recommend that he veto the bill,” the statement added.

Senate

The Senate Appropriations Committee on June 16 approved its version of the Financial Services and General Government Appropriations Bill for FY 2017 by a 30-to-0 vote (TAXDAY, 2016/06/17, C.1). Funding for the IRS would be set at $11.2 billion, a figure that is higher than the House’s proposal and equivalent to the enacted FY 2016 level. That bill also now heads to the Senate floor.

By Jessica Jeane, Wolters Kluwer News Staff

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