WASHINGTON (AP) — IRS leadership announced Thursday that the agency has recovered $4.7 billion in back taxes and proceeds from a variety of crimes since the nation’s tax collector launched the flagship tax agency in 2022. , Democrats’ climate and health care law has received a massive flood of funding.
The announcement comes amid a promised reckoning by Republicans, who will hold a majority in both chambers in the next Congress and have long called for the repeal of tens of billions of dollars in funding provided by Democrats for the agency.
Meanwhile, IRS leadership hopes to justify cutting the agency’s existing funds.
In a phone call with reporters to preview the announcement, IRS Commissioner Danny Werfel said improvements made to the agency during his tenure would assist the novel administration and the novel Republican-majority Congress further their goals of extending the tax cut – and Employment Act 2017.
Republicans plan to extend about $4 trillion in expiring GOP tax cuts. This is a signature domestic policy success of Trump’s first term and an issue that could define his return to the White House.
“We know there is serious discussion about a major tax bill in the next Congress,” Werfel said, “and given the improvements we have made since I have been here, I am fairly confident that the IRS will be well positioned.” to implement any novel tax law Congress passes.”
The tax revenues announced Thursday include $1.3 billion from high-income taxpayers who failed to pay past-due tax debts, $2.9 billion related to IRS Criminal Investigation work on crimes such as drug trafficking and terrorist financing, and 475 Millions of dollars in proceeds from criminal and civil litigation involving whistleblower information.
The IRS also announced Thursday that it has collected $292 million from more than 28,000 high-income taxpayers who have not filed taxes since 2017, an raise of $120 million since September.
Despite the successes, the future of the agency’s funding remains in limbo.
The IRS originally received an $80 billion cash injection under the Inflation Reduction Act, but the agreement between Republicans and the White House on the debt ceiling and budget cuts through 2023 resulted in $1.4 billion being missed The agency was withdrawn and a separate agreement was reached to take $20 billion from the IRS over the next two years and redirect those funds to other programs outside of defense.
In November, U.S. Treasury officials called on Congress to release $20 billion in IRS enforcement money tied up in legislation that effectively froze the money.
The $20 billion in question is separate from another $20 billion withdrawn from the agency last year. However, the legislative mechanism that kept the government afloat inadvertently resulted in a doubling of the one-off cut.
Treasury officials warn of dire consequences if inaction actually removes funding.
Trump announced plans last week to appoint former Missouri congressman Billy Long, who worked as an auctioneer before serving six terms in the House, as the next commissioner of the IRS. Democrats like Sen. Ron Wyden (D-Ore.) call Long’s nomination “a bizarre decision” since Long “entered the fraud-plagued industry surrounding the employee retention tax credit.”
Trump said on his social media page: “Taxpayers and the wonderful people at the IRS will love having Billy at the helm.”
Werfel’s term is set to end in 2027, and he has not indicated whether he plans to step down before Trump’s inauguration. By law, Trump is allowed to fire Werfel.
