House Advances $11.7B Cut to IRS Operations
A federal spending package advanced by the House in a 341-88 vote on Jan. 22 includes a shadow $11.7 billion cut to IRS operations funding.
If passed by the Senate, which appears likely because the bills were preconferenced with bipartisan support, the clawback would leave just $10 billion of the nearly $80 billion originally provided to the IRS in 2022 by the Inflation Reduction Act.
More than 80% of the cut, tucked into the fiscal 2026 Labor, Health and Human Services, Education, and Related Agencies spending bill—an appropriations bill that typically doesn’t include funding related to the IRS or Treasury., would be to the newly created technology and operations unit.
The rescission comes on the heels of a proposed 9% cut to annual IRS appropriations in the fiscal 2026 financial services and general government bill, which passed the House on Jan. 14.
Lawmakers are working to pass a suite of spending bills before Jan. 30 to avoid a government shutdown. However, tax filing season begins on Jan. 26, so the IRS and Treasury would likely keep on employees involved in the filing season even if appropriations lapse.