January 31, 2022

Whitehouse Joins Call for Increased IRS Funding As Americans Prepare for Tax Filing Season

Persistent underfunding expected to contribute to challenges this year

Providence, RI – U.S. Senator Sheldon Whitehouse (D-R.I.), Chairman of the Senate Finance Subcommittee on Taxation and IRS Oversight, has joined U.S. Senators Elizabeth Warren (D-Mass.) and Jeff Merkley (D-Ore.) in sending a letter to Treasury Secretary Janet Yellen expressing concern that persistent underfunding of the Internal Revenue Service (IRS) will have negative effects on American taxpayers this year. Tax filing season began last week.

The Senators call for a minimum 14 percent increase in annual IRS funding, and an $80 billion investment in the IRS over 10 years. Years of underinvestment in the IRS, compounded by pandemic-related challenges, have left the agency ill-equipped to assist Americans with basic tax filing needs and crack down on wealthy tax cheats. In fact, recent reporting has detailed how many IRS services could be impaired because of budget constraints and pandemic-related issues. The senators are urging Congressional Republicans to rethink their opposition to substantial investments in the IRS – including opposition to the President’s proposal for nearly $80 billion in IRS funding over the next 10 years, which has been included in the Build Back Better Act.

“Your department has warned of a ‘frustrating season’ for taxpayers, including processing and refund delays and issues with other taxpayer services on which millions of Americans rely. These risks come as no surprise after over a decade-long gutting of the IRS budget, which has prevented the agency both from taking action against wealthy tax cheats and providing adequate assistance to the majority of Americans trying to honestly file their taxes,” wrote the senators.

Corporate lobbyists and anti-tax extremists have long pushed to underfund the IRS, crippling the agency’s ability to assist taxpayers. According to IRS Commissioner Charles Rettig, the agency’s FY 2021 budget was $2.7 billion less than its FY 2010 budget in real terms, a 22 percent reduction. As a result, IRS staffing has also fallen 22 percent since FY 2010, while the number of tax filers has increased by 14 percent. During the 2021 tax filing season, IRS assisters answered only one out of every nine calls. Meanwhile, processing delays have left the IRS with a backlog of 10 million returns. Treasury officials have warned taxpayers to expect more of the same, or worse, this year.

The senators continued: “We are glad to be working with the Biden Administration on its proposal to invest nearly $80 billion in the IRS over the next 10 years as part of the Build Back Better Act. As you have emphasized, this funding will allow the IRS to pursue better enforcement with respect to wealthy taxpayers and large corporations, raising at least $2.3 trillion over the next two decades, according to Treasury estimates. But, just as important, this funding will allow the IRS to make transformative investments in taxpayer services, including hiring staff to answer taxpayer calls and process returns and refunds, as well as modernizing IT systems to help taxpayers file their taxes and claim tax credits and refunds.”

Last week, Whitehouse and tax preparers from Progreso Latino’s Volunteer Income Tax Assistance (VITA) program released a video to help spread the word about tax changes to look out for this filing season thanks to the American Rescue Plan.

Meaghan McCabe, (401) 453-5294

Press Contact

Meaghan McCabe, (202) 224-2921