Congress Sends Funding Bill With IRS Cuts to Trump’s Desk

The House passed legislation Tuesday funding the IRS, securing an end to a short lapse in annual spending while cutting both the agency’s short-term and long-term budgets.

The IRS funding, along with funding for the rest of the Treasury Department, was included as part of a roughly $1.2 trillion funding package that is now headed to President Donald Trump’s desk for his expected signature. The bill passed 217-214 in a vote that fell largely but not entirely along party lines.

Enactment of the package would end a brief annual funding lapse just as filing season gets underway. All IRS employees were exempt from furlough and directed to work this week without the promise of on-time pay. Agency leadership drew on supplemental funding from Democrats’ 2022 tax-and-climate law to maintain normal operations there this week.

The bill designates $11.2 billion to the IRS for the fiscal year that started in October, a decrease from its previous spending levels.

Enforcement’s $5 billion would take up a plurality of that funding, while the bill would provide $3 billion for taxpayer services and $3.2 billion for operations support. But the IRS would get to wield expanded transfer authorities if leadership sought to move money between those accounts.

The legislation also rescinds $11.7 billion in mandatory spending from Democrats’ 2022 tax-and-climate law.

A combination of congressional rescissions and agency spending has depleted tens of billions of dollars of the roughly $80 billion Democrats had directed toward the IRS. The previous cuts had reduced the pot of funding to $37.6 billion, and the IRS has spent nearly $16 billion of that through the end of the last fiscal year, according to an agency publication.