The House Appropriations Financial Services and General Government Subcommittee held a June 29 markup of the fiscal year (FY) 2018 government appropriations bill that was released by the full committee in draft form the day before. The federal government budget bill, approved by voice vote in subcommittee, proposes reducing IRS funding by $149 million from current funding levels.
Comment. The Congressional Budget Office (CBO) released an estimate on June 29 that the federal government is likely to run out of money by mid-October if the debt limit is not increased. That timeframe could change, however, based upon modifications to federal spending and revenues over the next few months, the CBO said.
The budget bill, as approved by the House subcommittee, would provide $11.1 billion in funding for the IRS, marking a $111-million increase above President Trump’s budget request, the House Appropriations Committee noted in a news release.” This holds the agency’s budget to below the 2008 level, however, it provides increased funds to Operations Support to strengthen cybersecurity and IRS information technology – an Administration priority.”
Additionally, the bill includes provisions to combat underperformance and poor management at the IRS, according to the release. The bill proposes the following prohibitions:
—A prohibition on a proposed regulation related to political activities and the tax-exempt status of 501(c)(4) organizations. The proposed regulation could jeopardize the tax-exempt status of many nonprofit organizations and inhibit citizens from exercising their right to freedom of speech;
—A prohibition on funds for bonuses or to rehire former employees unless employee conduct and tax compliance is given consideration;
—A prohibition on funds for the IRS to target groups for regulatory scrutiny based on their ideological beliefs;
—A prohibition on funds for the IRS to target individuals for exercising their First Amendment rights;
—A prohibition on funds for the production of inappropriate videos and conferences;
—A new prohibition on funds to implement new IRS guidance on conservation easements;
—A new prohibition on funds to determine church exemptions unless the IRS commissioner has consented and Congress has been notified; and
—A requirement for extensive reporting on IRS spending and information technology.
IRS Commissioner John Koskinen relayed to reporters on June 28 that the timeline for the budget process this year in the committee has seemed more compressed as compared to prior years, the IRS confirmed with Wolters Kluwer on June 29. Koskinen has previously expressed optimism for the IRS’s funding in FY 2018, saying he has had positive discussions with the new leadership at the Treasury and lawmakers (TAXDAY, 2017/04/06, I.2).
“The IRS is reviewing the House budget proposal. We look forward to continuing the discussions with the committees as the budget process continues,” the IRS told Wolters Kluwer in a statement on June 29.
By Jessica Jeane, Wolters Kluwer News Staff
Text of Legislation Making Appropriations for Financial Services and General Government for the Fiscal Year Ending September 30, 2018