Senate Subcommittee Weighs IRS Budget Requests for FY2023

WASHINGTON, D.C. – U.S. Senator Cindy Hyde-Smith (R-Miss.) today said funding increases sought by the Internal Revenue Service (IRS) must be met with “fiscally-responsible decision making” for the agency to overcome persistent backlogs and deficient customer service.

Hyde-Smith, ranking member of the Senate Financial Services and General Government Appropriations Subcommittee, questioned IRS Commissioner Charles P. Rettig at a hearing to review the agency’s FY2023 budget request.  

“The IRS entered this year’s tax filing season with a historically high backlog of unprocessed paper returns and correspondence.  When such issues arise, the IRS usually speaks about the need for more funding,” Hyde-Smith said.  “Despite robust funding, critical IT modernization projects lag, the tax gap remains wide, the backlogs remain high, and customer service is at an all-time low.”

“I believe it is time for these funding increases to be met with fiscally-responsible decision making — decision making that prioritizes the everyday taxpayer and efficiency,” she said.  “I want to ensure that money appropriated to the IRS is no longer diverted away from measures and programs devoted to improving taxpayer services and enforcement.”

The Biden administration’s FY2023 budget recommends $14.1 billion for the IRS, a 12 percent increase over the $12.6 billion provided by Congress for FY2022.  Hyde-Smith noted that $1.0 billion of $3.0 billion in supplemental funding provided since 2020 remains unused.

Hyde-Smith covered a variety of issues with Rettig, including:  efforts to eliminate backlogs that include 3.3 million unprocessed paper tax returns and 380,000 pieces of unopened mail; technology upgrades to prevent future backlogs; poor customer service; harboring data on IRS employees who request COVID-19 vaccine religious exemptions; and other topics.

Additionally, Hyde-Smith sought information on the IRS “Special Delta Initiative,” part of an effort to increase work opportunities in underserved areas.  The IRS in March announced job openings for an automated collection system site in Clarksdale.