Week in Insights: Tax Administration Funding Needs a Second Look

Curated by Melanie Cohen

The IRS’s budget for fiscal 2023 was $16.1 billion, but many people may not realize that hundreds of millions of dollars from that budget go to other government agencies for services rendered.

For instance, the IRS has an interagency agreement with the National Archives and Records Administration to store and manage taxpayers’ paper files. It paid NARA approximately $160 million for these services from 2016 through 2020. The fees are projected to rise, with the IRS expected to pay about $191 million from 2021 through 2025.

These kinds of agreements are needed both functionally and ...