IRS Budget Sliced 13% as U.S. House Constrains Tax Agency

 The US House of Representatives voted to cut the Internal Revenue Service’s budget by $1.14 billion in an effort to rein in unnecessary audits and enforcement actions the Congress deems inappropriate.

 The vote came Wednesday in a pair of amendments offered by Republicans Paul Gosar of Arizona and Bill Huizenga of Michigan. Both proposals were passed by voice vote.  The changes would leave the IRS with a budget of $9.8 billion for the fiscal year that starts Oct. 1 -- 13 percent below the current year  funding level and 21 percent below the level the administration has requested.

 Adoption Credit

 Huizenga’s amendment targeted the frequent audits of people claiming a credit for adoption of children.

The National Taxpayer Advocate found that 69 percent of people claiming the credit were audited in 2012 and more than half of those audits ended with the government getting no additional money.

 Enforcement Budget

 Gosar’s amendment reduces $353 million and Huizenga’s proposal cuts an additional $788 million, both from the IRS’s enforcement budget.

 Administration officials have said that additional enforcement spending yields a return of as much as $6 for every dollar spent. The Obama administration has said the president would veto the measure if it were passed.

 The IRS has been under a series of congressional reviews for more than a year since it said it had given extra attention to small-government groups seeking tax-exempt status.  That revelation started a criminal inquiry, prompted congressional investigations and led to the departure of several of the agency’s senior leaders.

 The bill is H.R. 5016.

 A Senate appropriations subcommittee wrote a bill providing a 2 percent increase for the IRS. The full appropriations panel hasn’t voted because of a dispute over amendments, and the IRS issue is likely to become a point of contention as Congress tries to complete its funding bills. The next fiscal year starts Oct. 1.

Sources:  US House of Representatives at https://www.govtrack.us/congress/bills/113/hr5016; Bloomberg News at http://www.bloomberg.com/news/2014-07-15/irs-budget-sliced-13-as-house-seeks-to-rein-in-agency.html