Bill Overview
Title: IRS Funding Accountability Act
Description: This bill delays for a 60-day period funding for the Internal Revenue Service (IRS) enforcement activities enacted by the Inflation Reduction Act (except for eliminating return processing backlogs and reducing call wait times) until an annual spending plan for such activities is submitted to the congressional tax and appropriation committees. Congress may enact a joint resolution of disapproval of the spending plan before the end of the 60-day period requiring the IRS to submit a new spending plan. The IRS and the Department of the Treasury must make quarterly reports to the committees on expenditures for enforcement activities. The bill requires reductions in appropriations to the IRS for any failure to submit required reports.
Sponsors: Rep. Kelly, Mike [R-PA-16]
Target Audience
Population: People affected by IRS enforcement capabilities
Estimated Size: 150000000
- The bill affects the IRS's funding and operation schedule, specifically enforcement activities.
- Delays in funding could impact IRS staffing and resources for compliance and enforcement actions.
- The bill specifically ensures that return processing and call wait times will not be affected, focusing the impact on enforcement activities.
- IRS funding affects taxpayers in the U.S. predominantly, who may face changes in compliance expectations or enforcement actions.
- Businesses and individuals subject to IRS audits or enforcement actions are directly affected by changes in IRS enforcement capabilities.
- The IRS annually interacts with millions of taxpayers, but only a subset is typically involved in enforcement actions.
Reasoning
- The IRS Funding Accountability Act will have varied impacts on different segments of the population. Primary considerations include individuals and businesses that are currently or potentially subject to IRS enforcement activities, such as audits or investigations. While return processing and customer service will remain unaffected, there might be a temporary slowdown in enforcement proceedings due to the delay in funding.
- The budget limitation suggests a focus on targeted, significant cases rather than widespread enforcement activities. Thus, the population most impacted includes those under scrutiny for tax compliance. Delays in enforcement might benefit these entities in the short term with delay in audits or penalties.
- Given the scale of resources, widespread population effects like those affecting everyday compliant taxpayers or those expecting refunds will be minimal or negligible, ensuring efficient use of the allocated budget.
Simulated Interviews
Small Business Owner (New York, NY)
Age: 45 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 1.0 years
Commonness: 10/20
Statement of Opinion:
- The policy might delay my audit, which could give me more time to prepare my documentation.
- Concerned that ongoing uncertainty regarding the audit process could affect financial planning for my business.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 5 |
| Year 2 | 7 | 6 |
| Year 3 | 6 | 6 |
| Year 5 | 6 | 6 |
| Year 10 | 5 | 5 |
| Year 20 | 5 | 5 |
Corporate Tax Consultant (Houston, TX)
Age: 53 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 1.0 years
Commonness: 7/20
Statement of Opinion:
- I foresee delays in how IRs schedule enforcement actions, impacting compliance strategies for my clients.
- This can mean mixed outcomes - possibly beneficial postponements or unwanted uncertainty for corporate tax planning.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 6 | 5 |
| Year 3 | 5 | 5 |
| Year 5 | 5 | 5 |
| Year 10 | 5 | 4 |
| Year 20 | 4 | 4 |
Freelance Photographer (Los Angeles, CA)
Age: 30 | Gender: male
Wellbeing Before Policy: 4
Duration of Impact: 2.0 years
Commonness: 15/20
Statement of Opinion:
- I worry less about immediate enforcement action given this delay in funding, but future uncertainty remains.
- The potential for improved processes if the IRS re-evaluates their spending could be beneficial long term.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 4 |
| Year 2 | 5 | 4 |
| Year 3 | 4 | 4 |
| Year 5 | 4 | 4 |
| Year 10 | 4 | 4 |
| Year 20 | 4 | 4 |
Retired (Miami, FL)
Age: 65 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 0.0 years
Commonness: 19/20
Statement of Opinion:
- I don't see an immediate effect on my life, as long as my filing and processing continue as normal.
- IRS expected further funding issues could affect future services I might need.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 7 |
| Year 3 | 7 | 7 |
| Year 5 | 7 | 7 |
| Year 10 | 6 | 6 |
| Year 20 | 6 | 6 |
Government Accountant (Seattle, WA)
Age: 40 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 5.0 years
Commonness: 3/20
Statement of Opinion:
- The delayed funding complicates coordination efforts as federal and local efforts are aligned with IRS enforcement actions.
- Mixed long-term effects could mean reallocation of resources, potentially beneficial after reassessment.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 6 | 6 |
| Year 3 | 6 | 6 |
| Year 5 | 7 | 6 |
| Year 10 | 6 | 6 |
| Year 20 | 6 | 6 |
IRS Employee (Chicago, IL)
Age: 39 | Gender: male
Wellbeing Before Policy: 5
Duration of Impact: 1.0 years
Commonness: 2/20
Statement of Opinion:
- The policy introduces uncertainty regarding resources and workload.
- Potential temporary easing of workload but might lead to backlog when funding resumes.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 5 |
| Year 2 | 5 | 5 |
| Year 3 | 4 | 5 |
| Year 5 | 4 | 5 |
| Year 10 | 6 | 6 |
| Year 20 | 6 | 6 |
Entrepreneur in Tech Start-up (San Francisco, CA)
Age: 28 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 3.0 years
Commonness: 8/20
Statement of Opinion:
- While enforcement might be delayed, I remain concerned about clarity and timeliness in IRS communications.
- Hopeful that improved scrutiny on IRS spending will enhance future interactions and responsiveness.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 6 | 6 |
| Year 3 | 6 | 5 |
| Year 5 | 5 | 5 |
| Year 10 | 5 | 5 |
| Year 20 | 5 | 5 |
Lawyer specializing in Tax Law (Boston, MA)
Age: 50 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 1.5 years
Commonness: 5/20
Statement of Opinion:
- Policy impacts are of professional interest, as shifts in enforcement dictate case influx.
- Few short-term effects expected unless systemic changes arise from budget discussions.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 6 | 6 |
| Year 3 | 6 | 6 |
| Year 5 | 5 | 5 |
| Year 10 | 5 | 5 |
| Year 20 | 5 | 5 |
Financial Planner (Denver, CO)
Age: 60 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 3.0 years
Commonness: 4/20
Statement of Opinion:
- Short-term relief for some clients under review may occur, but advisories must stress future need for compliance.
- Expect no major disruptions unless IRS further changes enforcement structure post policy review.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 7 |
| Year 3 | 7 | 7 |
| Year 5 | 6 | 6 |
| Year 10 | 6 | 6 |
| Year 20 | 6 | 6 |
Graduate Student in Economics (Atlanta, GA)
Age: 26 | Gender: female
Wellbeing Before Policy: 8
Duration of Impact: 0.0 years
Commonness: 18/20
Statement of Opinion:
- This reflects a significant oversight measure, potentially delaying only enforcement uncertainties.
- Curious about the potential impact on broader fiscal strategies and treasury operations the IRS may adopt.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 8 |
| Year 2 | 8 | 8 |
| Year 3 | 8 | 8 |
| Year 5 | 8 | 8 |
| Year 10 | 7 | 7 |
| Year 20 | 7 | 7 |
Cost Estimates
Year 1: $30000000 (Low: $20000000, High: $50000000)
Year 2: $5000000 (Low: $3000000, High: $10000000)
Year 3: $5000000 (Low: $3000000, High: $10000000)
Year 5: $5000000 (Low: $3000000, High: $10000000)
Year 10: $5000000 (Low: $3000000, High: $10000000)
Year 100: $5000000 (Low: $3000000, High: $10000000)
Key Considerations
- The bill delays funding for enforcement activities, which could hinder the IRS's short-term ability to perform comprehensive audits.
- Imposing a requirement for spending plans and quarterly reports adds administrative tasks for the IRS.
- The possibility of disapproval from Congress requires that the IRS aligns its spending more closely with Congressional expectations.
- Although delays might impact compliance temporarily, long-term effects could counterbalance initial setbacks if oversight leads to improved efficiency.