What You Need to Know
- IRS' FY 2021 budget — factoring in inflation and mandatory pay raises — is really a 22% reduction from 2010, Rettig said.
- An increase in funding is needed so wealthy tax cheats and big corporations pay their fair share, Warren said.
- The budget reconciliation package must include significant, multi-year funding for the IRS, Warren said.
Sen. Elizabeth Warren, D-Mass., is pushing for increased funding for the Internal Revenue Service in the budget reconciliation package so the agency can chase down wealthy tax cheats.
IRS Commissioner Charles Rettig told Warren and other lawmakers that the agency’s fiscal 2021 budget — factoring in inflation and mandatory pay raises — “is really $2.7 billion less than in FY 2010 — a 22% reduction,” which will impede its ability to go after tax evaders.
“Because of this decrease, the IRS expects to support around 74,200 FTEs [full time equivalents] this fiscal year — a staffing level nearly identical to the IRS’s staffing level in 1973,” Rettig told Warren in a recent letter.
“Maintaining a flat budget will continue to deprive Americans of both the nature and quality of services they deserve, producing a continuing decline in fairness and service,” Rettig said. “Adding substantial multi-year mandatory funding, however, provides an opportunity to greatly improve federal tax administration for all Americans.”
Rettig’s letter was in response to an Aug. 10 inquiry by Warren as well as Sens. Bernie Sanders, I-Vt., and Sheldon Whitehouse, D-R.I., about revenue lost from tax avoidance by the wealthy and steps Congress must take to help the IRS enforce the tax code.
Warren said in a statement that this new information from the IRS “makes clear that unless we significantly increase IRS funding, wealthy tax cheats and big corporations will be able to continue to avoid paying their fair share to the tune of billions of dollars per year while everyone else suffers.”
Congressional leadership, she said, “must include in the budget reconciliation package significant, multi-year funding for the IRS to boost enforcement and bring in billions more in revenue each year.”