Any increase in IRS funding must be used for compliance assistance and not simply as a mechanism to target small businesses.
On Nov. 16, Sens. Chuck Grassley (R-Iowa) and John Thune (R-S.D.) introduced a bill requiring the IRS to specify how it plans to utilize the $80 billion awarded to the agency under the Inflation Reduction Act.
Short titled the IRS Funding Accountability Act, the bill would compel the IRS to submit a plan for the $80 billion within two months of the pending legislation becoming a law; failure to submit a plan would reduce the IRS’ funding by $10 million for every day of delinquency.
The legislation specifies that the plan from the IRS must include: costs and results of the agency’s efforts to date; clearly defined objectives and timelines; detailed analyses of IRS performance; and changes in income groups subject to audit.
According to Biden administration and IRS Nominee Danny Werfel – the prospective IRS Commissioner who would be subject to leading the Funding Accountability Act’s report requirements if he is appointed and the bill becomes law – the $80 billion will be spent on bolstering agency staff and improving the rate of processing returns for Americans.
Despite repeated verbal assurances from the White House and IRS officials that the $80 billion will not be used to unduly pursue small-business owners, the small business community continues to insist on formalized protections.
With limited time remaining in the 117th session of Congress, including time-intensive priorities for must-pass legislation, like the National Defense Authorization Act (NDAA), as well as a continuing resolution (CR) or another funding mechanism to keep the government open through the new year.
Without a pathway to include the IRS Funding Accountability Act as a germane amendment to one of these packages, it is unlikely there will be capacity for the legislation to move and pass through both the Senate and House.
For more information on IRS-related concerns for small-business owners, read and respond NSBA’s Action Alert. Sharing stories about how unchecked IRS resources will affect your bottom line could make the difference for the small-business community coast to coast.