Finance

Biden proposes $1.2B increase in IRS budget

President Biden’s fiscal 2022 budget unveiled Friday proposes a substantial increase in funding for the IRS, in an effort to prevent wealthy individuals and corporations from avoiding their taxes.

The budget proposal would provide $13.2 billion for the IRS next year, $1.2 billion, or 10.4 percent, higher than the enacted level for this year.

“With this funding, the IRS would: increase oversight of high-income and corporate tax returns to ensure compliance; provide new and improved online tools for taxpayers to communicate with the IRS easily and quickly; and improve telephone and in-person taxpayer customer service, including outreach and assistance to underserved communities,” the budget document states.

It also proposes an additional $417 million for tax enforcement under a multiyear initiative. In total, the budget is proposing $900 million in additional resources for enforcement of tax laws.

“The President’s funding request makes things fairer,” Treasury Secretary Janet Yellen said in a statement. “It injects capital into communities where capital is usually hard to come by. It will make paying taxes a more seamless process for millions of Americans. And it makes sure that corporations actually pay what they owe.”

The IRS saw its budget cut significantly in the early part of the last decade amid criticisms of the agency by congressional Republicans. 

Democrats have in recent years been emphasizing the need for more IRS funding, as they push to ensure that the wealthy and corporations are paying the taxes they owe. Some Republicans have also expressed openness to increasing the IRS’s budget, though others have said that the IRS should work to see if it can use its current resources more effectively.

Biden’s American Jobs Plan, released last week, proposes boosting tax enforcement against corporations as one of the ways to raise revenue to pay for investments in infrastructure.

Tags biden budget budget proposal Internal Revenue Service IRS IRS budget Janet Yellen Joe Biden

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