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NEWS | Congressional Concerns for IRS Funding Continue to Grow

NSBA stands by common sense policies that are both functional and practical.

Late last week, House Minority Leader Kevin McCarthy announced his desire to see a roll back in the $80 billion funding recently allotted to the IRS, citing concerns IRS will unfairly target certain groups, including small business. Passed as part of President Biden’s Inflation Reduction Act, IRS officials have repeatedly ensured the enhanced funding will not be used to unduly target individuals or small businesses.

While NSBA acknowledges these assurances, formalized safeguards guaranteeing these extra funds to the IRS will not affect families or small business – those with less ability to defend themselves against intensive IRS inquiries – will provide much-needed confidence to small-business owners.

According to Politico, the IRS has projected that it would hire 87,000 new employees over a decade with its extra funding; however, given sharp partisanship stretching from Capitol Hill to the White House, there’s essentially zero chance President Biden would approve any bill targeting the IRS’ new funds.

Meanwhile, in the Senate, Republicans on the Senate Finance Committee wrote a letter to IRS Commissioner Chuck Rettig last week asking for further details on how the agency planned to spend the $80 billion it is scheduled to receive over the next decade.

NSBA has been outspoken that efforts to close the so-called “tax gap” do not unduly burden small business through ramped-up enforcement at the cost of improved compliance assistance.

The IRS must focus their efforts and research to better identify noncompliant taxpayers, enhance taxpayer services to inform taxpayers of correct tax obligations and adjust its enforcement tools to target those who intentionally evade paying taxes. Adding new burdens and requirements on small businesses already struggling to do the right thing is simply the wrong answer.

Follow NSBA for the latest on small business tax policy from Washington, read the full 10-page letter from Senate Republicans here, and download NSBA’s latest issue brief here.


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