House Republicans Vote To Cancel Biden's Billion-Dollar IRS Funding

Kevin McCarthy is elected next Speaker of the U.S. House of Representatives at the U.S. Capitol in Washington
House Speaker Kevin McCarthy (R., Calif.) / Reuters
January 10, 2023

House Republicans, in the first act of their tenure in the majority, voted on Monday to rescind nearly $71 billion of the $80 billion that the previously Democratic-controlled Congress allocated to the IRS through the so-called Inflation Reduction Act.

The House passed the bill 221-210 along party lines, though the cancellation of funds will likely not make it past the Democratic majority in the Senate. The bill is part of House Republicans' campaign promise to "hold the administration accountable."

The Inflation Reduction Act, passed in August, allocated $80 billion to more than double the IRS workforce, which would make the agency larger than the Pentagon, State Department, FBI, and Border Patrol combined. Proponents of the bill argued that better IRS audits and scrutiny would target wealthy corporations that hide their income. According to a study from the nonpartisan Joint Committee on Taxation, the majority of the new revenue gained from IRS audits will actually come from those making less than $200,000 a year.

President Joe Biden in a statement Monday dismissed the Republicans' act, calling it "a reckless bill." Democrats argue that vetoing the funds only aids large corporations and puts more of the burden on middle-class Americans.

"With their first economic legislation of the new Congress, House Republicans are making clear that their top economic priority is to allow the rich and multibillion-dollar corporations to skip out on their taxes, while making life harder for ordinary, middle-class families that pay the taxes they owe," the White House said.

A Syracuse University study found, however, that in 2022 those who made below $25,000 were at least 550 percent more likely to be audited by the IRS than the average taxpayer.

"The IRS does not need a raise—it needs a reckoning," Rep. Jason Smith (R., Mo.), the recently elected chairman of the powerful House Ways and Means Committee, said about the bill.

Rep. Jeff Duncan (R., S.C.) said the money Democrats provided to the IRS had one purpose: "to go after small businesses [and] hard-working Americans to try to raise money for … reckless spending that has caused $31 trillion in debt in this nation."