The House Appropriations Committee on Tuesday released legislation that cuts overall funding to the Internal Revenue Service (IRS) while maintaining spending levels aimed at improving the agency’s customer service.  

The fiscal 2017 financial services measure provides $10.9 billion for the IRS, a cut of $236 million below last year’s enacted level and $1.3 billion below President Obama’s budget request.

{mosads}The bill maintains $2.1 billion for taxpayer services and an additional $290 million to improve customer service, such as phone and correspondence response times, fraud prevention and cybersecurity.

“The IRS has been plagued in recent years by the inappropriate actions of its employees and political leadership, resulting in the waste of taxpayer dollars and in unjust treatment and targeting of certain ideological groups,” the committee said in releasing the bill.

Overall, the spending bill, which will be considered in subcommittee on Wednesday, totals $21.7 billion in funding — $1.5 billion below the fiscal year 2016 enacted level and $2.7 billion below the president’s budget request.

The bill provides annual funding for the Treasury Department, the Judiciary, the Small Business Administration, the Securities and Exchange Commission, and other related agencies.

“The job of this bill is two-fold — to make wise investments with taxpayer dollars in the programs and agencies that we need to grow our economy and enforce our laws, and to tightly hold the reins on the over-spending and overreach within federal bureaucracies,” said House Appropriations Chairman Hal Rogers (R-Ky.).

The measure includes a provision that would stop the IRS from further implementing Obamacare, including a prohibition on any transfers of funding from the Department of Health and Human Services to the IRS for health law uses and a prohibition on funding for the IRS to implement an individual insurance mandate.

“The bill would stop the IRS from implementing the Affordable Care Act — a move that would take health insurance away from more than 20 million Americans,” said House Ways and Means Committee ranking member Sander Levin (D-Mich.).

“Republicans must put an end to these attacks on the IRS for political gain, and realize that their proposals have real consequences for hardworking Americans.”

Republicans have set their sights on reining in the IRS after it was discovered several years ago that the agency had targeted conservative groups seeking tax-exempt status. 

A Senate report released in 2014 found that the IRS severely mismanaged the applications of those Tea Party groups.

On Tuesday, the House Judiciary Committee is considering a proposal to censure IRS Commissioner John Koskinen for deleting emails requested by Congress as part of the investigation into the agency’s mismanagement.

Treasury Secretary Jack Lew, who defended Koskinen, said that “despite facing massive budget cuts, the IRS continues to carry out its mission of enforcing our nation’s tax laws while striving to provide quality service to taxpayers.”

“It is critical that John has the tools he needs to keep his focus on driving the important work the IRS conducts on behalf of the American people,” Lew said. 

Levin, who said that Republicans have cut the IRS’s budget by close to $1 billion from 2010-2015, said that the proposed IRS cut shows that Republicans “still don’t grasp the consequences of their actions.” 

“Cuts made by Republicans to the IRS’s budget since 2010 have resulted in terrible customer service, outdated technology and the lowest level of audits in a decade,” Levin said.  

Last year, Congress increased the IRS’s budget for customer service, not surprisingly, customer service improved.

“We should restore the IRS’s funding, not continue to cut it.” 

For the IRS, the bill would prohibit bonuses, production of inappropriate videos and conferences and funds for the White House to order the IRS to determine the tax-exempt status of an organization. The measure also would require extensive reporting on IRS spending.

“In addition, our bill reduces funding for agencies that we believe can produce results with fewer dollars,” said Ander Crenshaw (R-Fla.), chairman of the House Appropriations Subcommittee on Financial Services.

“And, where there is a history of inappropriate behavior, such as the Internal Revenue Service, cutbacks and reforms are recommended to hold them accountable,” Crenshaw said.

For other agencies, the measure provides $1.5 billion for the SEC, which is $50 million below the fiscal year 2016 enacted level and $226 million below the president’s request.

The measure would shift funding for Consumer Financial Protection Bureau (CFPB) to the annual congressional appropriations process instead of receiving direct funding from the Federal Reserve, a move congressional Republicans have pushed for since the agency was created. 

The measure also calls for the CFPB to create a five-member commission to take the place of the single director, another issue that Republicans have pushed in recent years. 

The bill also would: 

• Provide $200 million for construction of a new Federal Bureau of Investigation headquarters.

• Provide $7 billion for the federal courts, an increase of $177 million above the fiscal year 2016 enacted level.

• The bill contains $883 million for the Small Business Administration.

• The legislation provides funding above the president’s request for Small Business Development Centers ($125 million), State Trade and Export Promotion ($20 million) and Women’s Business Centers ($19 million).

• The General Services Administration (GSA) gets $9.2 billion out of the Federal Buildings Fund, a reduction of $951 million below the fiscal year 2016 enacted level. 

• The Federal Communications Commission (FCC) would receive $315 million, a cut of $69 million below last year’s level. The legislation prohibits the FCC from implementing the net neutrality order until certain court cases are resolved.

• The bill contains a $725 million federal payment to the District of Columbia, which is $4.6 million below the fiscal 2016 enacted level and $38 million below the request. The measure includes $45 million for the Scholarships for Opportunity and Results Act (SOAR), which provides scholarships to low-income students in DC to attend private schools and reauthorizes the program through 2021.

In addition, the legislation keeps provisions prohibiting federal and local funds from being used for abortion or to further marijuana legalization and it maintains a prohibition on federal funds from being used for needle exchanges.

• The measure provides one-time funding increases for the presidential transition for the Executive Office of the President ($7.6 million), General Services Administration ($9.5 million), National Archives and Records Administration ($4.9 million) and federal payment for Emergency Planning and Security in the District of Columbia ($25 million).

Updated at 6:15 p.m.

Tags Ander Crenshaw Hal Rogers Internal Revenue Service IRS targeting controversy Jack Lew Sander Levin
See all Hill.TV See all Video

Most Popular

Load more


See all Video