published : 2023-11-08

Yellen Defends IRS Against Funding Cuts, Calls it 'Damaging and Irresponsible'

Treasury Secretary warns playing politics with IRS funding is unacceptable

A photo of Treasury Secretary Janet Yellen delivering her remarks at the IRS headquarters in Washington. (Taken with a Nikon D850)

Treasury Secretary Janet Yellen took a stand at the IRS headquarters in Washington, defending the agency against proposed funding cuts by Republican lawmakers.

In exchange for over $14 billion in aid to Israel in their war against Hamas, Republicans had suggested cutting funding for the IRS.

Yellen emphasized that the current proposals to reduce IRS funding are particularly crucial to discuss given the importance of the agency's work.

She stressed that playing politics with IRS funding is unacceptable and that such cuts would be damaging and irresponsible.

Last year, Democrats allocated $80 billion for the IRS in a bill signed by President Biden, aiming to improve taxpayer services and reduce the estimated $600 billion tax gap.

An image of a congressional hearing room where Republican lawmakers are proposing funding cuts to the IRS. (Taken with a Canon EOS 5D Mark IV)

The funding allocation has faced opposition from Republicans and critics who argue that a stronger IRS could harm lower-income Americans.

Recently, House Republicans passed a bill, mainly along party lines, to cut IRS funding and redirect $14.3 billion to aid Israel.

Despite support from a few Democrats, the Senate Democrats and the White House consider the bill a nonstarter.

Yellen showcased ongoing modernization and improvement efforts at the IRS, including investments in customer service and technology.

She also mentioned the upcoming launch of a limited-scope free Direct File program and the ability for taxpayers to upload additional tax forms by 2024.

A snapshot of the White House as Senate Democrats and the Biden administration reject the bill to cut IRS funding. (Taken with a Sony Alpha A7 III)

The Treasury Secretary highlighted the significant impact of these enhancements, benefiting both taxpayers and the IRS system as a whole.

Yellen reassured that the IRS remains focused on enhancing enforcement for high-income earners while dispelling concerns of increased audits for Americans earning less than $400,000 per year.

This year, the IRS has already collected $160 million in back taxes as part of its crackdown on tax evaders.