IRS scores year-end funding boost

The spending bill that President Obama signed into law on Friday provides an increase in funding to the Internal Revenue Service, a rare win for an agency that has been on the outs with congressional Republicans.

The $1.1 trillion omnibus provides an additional $290 million for the IRS, an increase of 3 percent over the last fiscal year. 

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Lawmakers specified that the additional funding is to be used for “taxpayer services to ensure that the agency responds to taxpayer questions in a timely manner, and to improve fraud detection and prevention and cybersecurity,” according to a summary from Republicans on the House Appropriations Committee.

The base funding level for the IRS was kept at about $10.9 billion.

The IRS had seen its funding repeatedly slashed since the controversy erupted over the agency’s heightened scrutiny of Tea Party groups.

In fiscal 2015, Republicans hit the IRS with a $346 million budget cut, pushing the agency’s overall funding lower than it had been in fiscal 2008. In fiscal 2014, the IRS received $526 million less than it had the year before that. 

The omnibus law provides $1.7 billion less for the IRS than Obama had requested for the agency in his budget.

“While the bill also contains a modest increase in IRS funding, the IRS budget would still be well below the level the agency needs to provide the kind of quality service the American people deserve," Treasury Secretary Jack LewJack LewFed, Group of 7 monitoring markets after Brexit vote Senate Dem won't rule out blocking Puerto Rico debt relief Puerto Rican officials plead with Senate to pass debt relief MORE said in a statement Friday. "Fully funding the IRS is important for individual taxpayers, the security of our data, and our ability to collect the revenue our country needs." 

Still, the outcome for the IRS in the omnibus could have been far worse.

A bill advanced by the House Appropriations Committee earlier this year that would have slashed IRS funding by $838 million, while a bill passed by the Senate Appropriations Committee would have reduced funding by $470 million. 

Instead, the spending package gives the IRS a nearly $300 million bump, which could help ease what IRS Commissioner John Koskinen has characterized as a near-crisis at the agency, with the agency struggling to provide basic services to taxpayers.

Koskinen asked in October for increased funding to fight cybersecurity risks. The agency said earlier this year that hackers had accessed the tax returns of more than 300,000 taxpayers. 

The IRS commissioner also complained in February that people who were calling during tax season were having trouble getting through to a live representative. The agency was working with 13,000 fewer people in the 2015 tax season, he said.

While the spending increase in the omnibus aims to address those issues, the tensions between the GOP and the IRS haven’t gone away. 

A group of House Republicans filed a resolution last month to impeach Koskinen, and several of the GOP’s leading presidential candidates have called for abolishing the agency.

During October's president debate hosted by CNBC, Sen. Ted CruzTed CruzVa. GOP delegate files lawsuit over bound convention votes Our most toxic export: American politick 'Never Trump' group ad compares Trump to Reagan MORE (R-Texas) said that his tax reform plan would enable "every citizen to fill out their taxes on a postcard, so we can eliminate the IRS."

And the undercard debate hosted by Fox Business last month, former Arkansas Gov. Mike Huckabee said he is proposing getting rid of the agency because "the government has no business knowing how much money we make and how we made it." 

Speaker Paul RyanPaul RyanGun-control supporters plan next steps versus NRA House Democrat sit-in: well intended but in the wrong well Trump up, Obama down after shocking Brexit vote MORE (R-Wis.), who negotiated the spending deal with Democrats, emphasized that the package includes reforms in response to the IRS targeting scandal.

The tax portion of the deal, Ryan said, “includes several bipartisan reforms to rein in the IRS, such as firing employees who target taxpayers based on the personal religious or political beliefs.” 

The legislation states that an IRS employee should be fired for taking official action for political purposes, and prohibits the IRS from imposing a gift tax on contributions to certain nonprofits.