The Tax Times: TIGTA Issues Report That The IRS Has Expended $6.9 Billion (11.9 percent) of its $57.8 Billion IRA Funding.

Tuesday, October 15, 2024

TIGTA Issues Report That The IRS Has Expended $6.9 Billion (11.9 percent) of its $57.8 Billion IRA Funding.

TIGTA Issued Report Number 2024-IE-R020 on September 30, 2024 entitled the IRS’s Inflation Reduction Act Spending Through June 30, 2024. It provides quarterly and cumulative reporting on the IRS’s use of IRA funding to implement its Strategic Operating Plan and is inclusive of all IRA expenditures through June 30, 2024.

As Of June 30, 2024, The IRS Expended Approximately $6.9 Billion (11.9 Percent)
of its $57.8 Billion IRA Funding.

In addition to the expended amounts shown on the graphic, the IRS expended approximately $11.6 million in Fiscal Year (FY) 2023 for the direct e-file tax return system, which is included in the total amount expended.

The IRA supplemental funding is available to the IRS through September 30, 2031, and is intended to help the IRS transform tax administration and improve the services provided to taxpayers. Like the funding the IRS receives as part of its annual appropriation, the IRA supplemental funding includes caps for the four primary budget activities, as follows:

Enforcement -- $24 billion.

The IRA originally provided $45.6 billion for the Enforcement funding activity. The subsequent Acts reduced the amount to $24 billion.

Operations Support -- $25.3 billion.
BSM -- $4.8 billion.
Taxpayer Services -- $3.2 billion.

In addition, the supplemental funding provided by the IRA also included $500 million for the necessary expenses relating to the implementation of the Energy Security provisions and $15 million to study the feasibility of implementing a direct e-file tax return system.

The IRS has used supplemental IRA funding to fund operations as its annual appropriations were not enough to cover its general operating expenses.

The IRS received the same annual appropriation amount for FY 2024 that it received in FY 2023 with no adjustments for inflation.9 For FY 2024, the IRS estimates that $1.6 billion of IRA funding will be needed to cover its annual appropriation shortfalls for pay raises, inflationary increases already built into contracts, and other current services. IRS officials noted that the continued use of IRA funds to cover shortfalls in the annual appropriation will impact its ability to successfully deliver transformation objectives.

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