Republicans Seek to Cut IRS Funding for Military Aid to Israel
Republicans are proposing to slash funding for the Internal Revenue Service’s (IRS) free digital tax filing system in order to allocate $14 billion towards military aid for Israel’s war in Gaza. House Speaker Mike Johnson (R-La.) declared that Republicans were adamant about reducing the budget to cover the costs of the Israel war funding bill.
The House Rules Committee unveiled legislation on Monday that includes $14 billion in cuts to the IRS. This reduction will be taken from the $67 billion in additional IRS funding provided by last year’s Inflation Reduction Act. The Inflation Reduction Act aimed to assist the IRS in combating tax evasion by the wealthy and modernizing its internal and public-facing systems and software.
Aside from targeting the free digital filing program, the proposed cuts by the GOP would also affect IRS funding for enforcement, operations support, policymaking, and internal investigations. The only areas spared from the cuts are taxpayer assistance and the modernization of internal business systems.
Tax preparation companies such as TurboTax, Intuit, and H&R Block have long opposed the creation of a free digital tax filing system by the IRS. They have spent millions of dollars on lobbying efforts. In 2002, an agreement was reached between the government and these companies, wherein the government agreed not to pursue a free online filing system. In return, the tax preparers would offer their services for free to filers earning less than $73,000 per year. This agreement is set to expire in 2025, based on an amendment issued last March.
Despite the agreement, a 2019 investigation by ProPublica revealed that tax preparation companies often push individuals who should be eligible for free services into paying for their assistance. A Government Accountability Office report found that although 70% of Americans were eligible for free digital tax preparation help under the agreement, only 3% actually utilized it.
The IRS promotes its free digital tax filing system as part of the Biden administration’s broader efforts to reduce administrative burdens and make it easier for Americans to interact with the government.
However, the GOP bill to cut the IRS funding provided in the Inflation Reduction Act is likely to face opposition in the Senate, where Democrats hold the majority, and on President Joe Biden’s desk. Senate Majority Leader Chuck Schumer (D-N.Y.) acknowledged the challenges, stating that a pay-for like this would make it much harder to pass.
In conclusion, Republicans are aiming to redirect IRS funding from the free digital tax filing system towards military aid for Israel’s war in Gaza. However, the bill is expected to face significant obstacles in the Senate and may not reach President Joe Biden for approval.
