The Trump administration on February 12 released its much anticipated fiscal year (FY) 2019 budget request, entitled “Efficient, Effective, Accountable An American Budget.” The administration’s proposal calls for $15 billion in IRS funding. “By investing in the modernization of Internal Revenue Service (IRS) systems, the Budget would help make the implementation of tax reform successful and support the President’s vision of making tax filing simpler for hardworking Americans,” the proposal reads.
Take Away. Presidential budget requests are not binding; rather, the requests offer a legislative proposal for congressional lawmakers. To that end, on February 9, Congress passed, and the president signed, the Bipartisan Budget Act of 2018 (P.L. 115-123), which sets federal spending parameters for the next two years (TAXDAY, 2018/02/12, W.1). “This budget lays out a thoughtful, detailed and responsible blueprint for achieving our shared agenda,” House Speaker Paul Ryan, R-Wis., said in a February 12 statement on Trump’s proposal.
The administration’s budget proposal breaks its IRS funding request into four parts. The administration suggests allocating $11.1 billion in base funding, $2.3 billion for key tax filing and compliance initiatives, and $110 million for IT modernization efforts. Additionally, funding is requested to expand and strengthen tax enforcement. In 2017, the IRS received $11.2 billion in funding.
“These additional investments proposed over the next 10 years are estimated to generate approximately $44 billion in additional revenue at a cost of $15 billion, yielding a net savings of $29 billion over 10 years,” the proposal states. The budget request also outlines several other proposals, which include initiatives to enhance taxpayer compliance and return preparer oversight.
The Senate Finance Committee (SFC) has two hearings lined up on February 14, which are scheduled to examine Trump’s budget proposal for Treasury and the IRS. Both Treasury Secretary Steven Mnuchin and Acting IRS Commissioner David Kautter are scheduled to testify.
Included in the budget request is the administration’s proposal for a $1.5 trillion-investment generating infrastructure package. Under the proposal, the federal government would spend $200 billion, calling for state and local government contribution, as well.
Infrastructure is a bipartisan priority, according to Senate Majority Leader Mitch McConnell, R-Ky. “Historically, infrastructure has been an area of bipartisan cooperation,” he said in a February 12 statement.
Several Democratic lawmakers are saying the infrastructure proposal does not offer enough money, however. SFC ranking member Ron Wyden, D-Ore., called the proposal a “drop in the bucket,” in a February 12 statement, criticizing the proposal for being geared toward wealthy investors. “Robust federal investment combined with innovative financing tools is a formula that improves transit, creates jobs and drives our economy forward,” Wyden said. Senate Democrats recently released an infrastructure proposal that calls for a $1-trillion investment from the federal government.
By Jessica Jeane, Wolters Kluwer News Staff