IRS Funding Clawbacks Would Be Reversed Under Senators’ Bill

Senators are introducing legislation that would provide tens of billions of dollars funding to the IRS, undoing a series of clawbacks.

The legislation, introduced by Sen. Angus King (I-Maine) and backed by Democrats including Senate Finance Committee ranking member Ron Wyden (D-Ore.), would provide the agency over $83 billion in mandatory funding through Fiscal Year 2031, reversing both recissions to funding initially provided in Democrats’ 2022 tax-and-climate law and discretionary spending cuts to the IRS. The funds are aimed at strenghtening the IRS’s customer service, technology, and enforcement efforts.

“A rich tax cheat who shelters mountains of cash among a web of shell companies and passthroughs is likelier to be struck by lightning than face an IRS audit, and Republicans want to keep it that way,” Wyden said in a statement. “This bill is about making sure the IRS has the resources it needs to go after wealthy tax cheats while improving customer service for the vast majority of American taxpayers who follow the law every year.”

The bill, announced on the deadline to file federal tax returns, is one of several bills Wyden has announced this week aimed at preventing wealthy taxpayers from dodging taxes. While it’s unlikely to gain traction while Republicans control Congress and the White House, it signals policies Democrats might want to pursue if they regain power.

In addition to reversing IRS funding cuts, King’s legislation would also call on the IRS to issue a report to Congress on the agency’s plan to shift auditing and enforcement resources to high-income individuals and large corporations.

The bill has the support of more than half of the Senate Democratic caucus, including Senate Minority Leader Chuck Schumer (D-N.Y.). The Budget Lab at Yale estimated that the bill would raise about $1 trillion in net revenue over a decade, according to a news release from the lawmakers.

The measure comes as House and Senate appropriators begin taking up fiscal 2027 funding legislation, which are likely call for more steep cuts to the agency.