A June 18 report from the Treasury Inspector General for Tax Administration (TIGTA) reckons that the IRS as of March had used about 10 percent of the approximately $57 billion in multi-year modernization funding that Congress has approved for the agency.
The multi-year funding – which flows from the Inflation Reduction Act (IRA) approved in 2022 – has been used in part to help modernize many of the IRS’s technological processes.
“As of March 31, 2024, the IRS expended approximately $5.7 billion of its $57.8 billion IRA funding,” the TIGTA report says.
“In addition to the expended amounts … the IRS expended approximately $11.6 million in FY 2023 for the direct e-file tax return system, which is included in the total amount expended,” TIGTA said.
The IRS originally received congressional approval for $79.4 billion of multi-year modernization funding. Since then, $21.6 billion of that funding has been rescinded by Congress.
“IRS officials indicated that due to the rescissions, the IRA funding for the Enforcement funding activity will likely be fully spent in FY 2029. Additionally, IRS officials noted that the rescissions will reduce revenues by more than $100 billion through FY 2034,” stated TIGTA.
The report also talks about IRS needing to tap into IRA-approved funding because of shortfalls in regular appropriations for the agency.
“IRS officials noted that the continued use of IRA funds to cover shortfalls in annual appropriation will impact its ability to successfully deliver SOP transformation objectives,” stated TIGTA.
“Specifically, the successful delivery of its SOP transformation objectives assumes that IRA funds will be used solely to support transformation efforts, while day-to-day operations will continue to be adequately supported by the annual appropriation,” TIGTA said.
