IRS Has $23.8 Billion in Funding as Leaders Promise Tech Updates

The IRS has about $23.8 billion from the 2022 tax-and-climate law to spend in the next six years, the Treasury Inspector General for Tax Administration said.

The agency initially received about $80 billion—available for use through Sept. 30, 2031—from the so-called Inflation Reduction Act to modernize and improve enforcement and taxpayer services. Congress later rescinded about half that money.

The IRS spent about $13.8 billion of the funding as of the end of March, according to an Aug. 1 report the agency’s watchdog released Tuesday. The largest expenditures were for employee compensation, totaling $6.1 billion. About 40% of the money spent on employee compensation happened in fiscal year 2025, which ended March 31. During that time, the Trump administration made several moves to shrink the size of the federal workforce, including a deferred resignation program in which employees could resign but still get paid through the end of the fiscal year.

• New IRS Commissioner Billy Long has promised to upgrade audit technology, and the Trump administration intends to accelerate modernization despite workforce cuts.
• The IRS canceled 93 contracts as of April 21 involving Inflation Reduction Act projects. They include support for the office of digital assets initiative, the integrated data retrieval system, and cybersecurity architecture, among others.