The IRS leadership announced on Thursday that the agency has successfully recovered $4.7 billion in back taxes and proceeds from various crimes following a significant increase in funding through the Democrats' key legislation in 2022. This achievement comes amidst looming challenges from Republicans, who are poised to take control of both chambers of Congress and have been vocal about rolling back the substantial funding allocated to the IRS by the Democrats.
The IRS Commissioner highlighted the improvements made during his tenure, expressing confidence in the agency's ability to support the incoming administration and the new Republican-led Congress in implementing an extension of the 2017 Tax Cuts and Jobs Act. The Republicans are gearing up to renew approximately $4 trillion in expiring tax cuts, a cornerstone of Trump's initial term in office.
The tax collections announced include $1.3 billion from high-income taxpayers with overdue tax debts, $2.9 billion from IRS Criminal Investigation efforts targeting crimes such as drug trafficking and terrorist financing, and $475 million from criminal and civil cases based on whistleblower information. Additionally, the IRS reported collecting $292 million from over 28,000 high-income non-filers who had not submitted taxes since 2017.
Despite these accomplishments, the future funding of the IRS remains uncertain. The agency initially received an $80 billion funding boost under the Inflation Reduction Act, but subsequent budget agreements led to a reduction of $1.4 billion and a plan to divert $20 billion from the IRS to other nondefense programs over the next two years.
In November, U.S. Treasury officials urged Congress to release $20 billion in IRS enforcement funds currently tied up in legislative constraints. Failure to act could have severe repercussions, as warned by Treasury officials. Former Missouri congressman Billy Long has been nominated by Trump to serve as the next IRS Commissioner, drawing mixed reactions from lawmakers.
As the IRS navigates these funding challenges and transitions in leadership, the agency remains focused on its mission to enforce tax laws and combat financial crimes effectively.
