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Updated October 13, 2023
Internal Revenue Service Appropriations, FY2024
Overview of the IRS Budget
Table 1. FY2024 IRS Appropriations
The Internal Revenue Service (IRS) has two primary
(bil ions of dol ars)
responsibilities: (1) collecting most of the revenue to fund
federal government agencies and programs, and (2)
FY2024 FY2024
enforcing taxpayer compliance with federal tax laws
H.R.
through activities like taxpayer assistance and audits.
4664
S. 2309
According to the most recent data, in FY2022, the agency
FY2023
FY2024
(Mark-
(Mark-
processed nearly 263 million tax returns and related forms,
Account
Enacted Request
up)
up)
collected $4.9 trillion in gross revenue, and issued refunds
totaling nearly $642 billion.
Taxpayer
$2.781
$3.422
$2.781
$2.781
Services
The IRS’s operating budget is a mix of annual
appropriations and miscellaneous resources. In FY2023,
Enforcement
$5.438
$5.904
$4.206
$5.438
appropriations account for 75% ($12.3 billion) of the
Operations
budget. The remaining 25% ($4.2 billion) includes
$4.101
$4.520
$4.101
$4.101
Support
unobligated balances from previous years, reimbursable
items, and $2.8 billion mandated by P.L. 117-169,
Business
commonly referred to as the Inflation Reduction Act (IRA).
Systems
$0.0
$0.290
$0.150
$0.0
The IRS has considerable leeway in how it uses
Modernization
nonappropriated funds.
Total
$12.320a
$14.137 $11.238 $12.319
Historically, IRS appropriations have been distributed
Sources: IRS’s FY2024 Budget Justification, Consolidated
among four accounts: taxpayer services, enforcement,
Appropriations Act, 2023 (P.L. 117-328), S.Rept. 118-61, and H.Rept.
operations support, and business systems modernization. As
118-145.
Table 1 shows, enforcement has been the largest of the
four, accounting for over 43% of combined FY2022 and
Notes:
FY2023 appropriations.
a. This figure does not include the $78.9 bil ion in funding provided
FY2023 IRS Appropriations
by the Inflation Reduction Act or the $1.4 bil ion partial
rescission of those funds by the Fiscal Responsibility Act of
In December 2022, Congress passed the Consolidated
2023.
Appropriations Act, 2023 (CAA, P.L. 117-328), which
funds most government operations (including the IRS) in
Inflation Reduction Act
FY2023. The IRS’s enacted appropriations (see Table 1)
The IRS FY2024 budget request is the first such request
were identical to FY2022 for three of the four
since the enactment of the Inflation Reduction Act (IRA,
appropriations accounts; Congress provided no funds for
P.L. 117-169) in August 2022. The act provided the IRS
the business systems modernization program in FY2023.
with $78.9 billion in mandatory funding that is available for
Overview of the FY2024 IRS
obligation through FY2031. Of this amount, the act
Budget Request
specified that $45.6 billion will go to enforcement, $25.3
billion to operations support, $4.8 billion to business
The Biden Administration is requesting $14.1 billion in IRS
systems modernization, and $3.2 billion to taxpayer
appropriations for FY2024, 14.7% more than the FY2023
services. By the end of August 2023, the IRS had obligated
enacted amount. Relative to FY2023, requested taxpayer
$2.9 billion of its IRA funds; $741.5 million of that amount
service funding is 23.0% greater, enforcement funding
went to taxpayer services and $193.8 million to
8.6% greater, and operations support funding 10.2%
enforcement.
greater. Requested business systems modernization funding
is 5.5% greater than it was it FY2022, the last year
Reflecting opposition by the House majority to IRA
Congress appropriated money for this purpose. Including an
enforcement funding, Congress rescinded $1.4 billion in
estimated $2.3 billion in other resources, the IRS’s FY2024
unobligated IRA enforcement funding in the Fiscal
budget request, if enacted, would provide the agency with
Responsibility Act of 2023 (P.L. 118-5). The rescission
an operating budget of $14.9 billion.
does not affect IRA funds for taxpayer services and
According to IRS budget documents, the FY2024 request
business systems modernization. Another $20 billion in
seeks to maintain FY2023 levels of operation and make
IRA funds is reportedly to be repurposed through the
significant improvements in taxpayer services,
FY2024 and FY2025 appropriations processes, under an
enforcement, and the business systems modernization
informal agreement between then-House Speaker Kevin
program, with the aim of lowering the federal tax gap.
McCarthy and President Joe Biden.
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Internal Revenue Service Appropriations, FY2024
House Appropriations Committee
for the acquisition of “investigative technology” by the
Markup of H.R. 4664
Criminal Investigation Division (CID).
On July 13, 2023, the House Appropriations Committee
marked up a Financial Services and General Government
H.R. 4664 as reported would provide $4.206 billion for
(FSGG) bill (H.R. 4664) to provide appropriations for the
enforcement in FY2024, $25 million of which would be
IRS and other agencies in FY2024. H.R. 4664 would
used to acquire investigative technology for the CID.
provide the IRS with $11.2 billion in appropriations for that
year, $1.1 billion less than the enacted amount for FY2023
S. 2309 as reported would provide $5.438 billion for
and $2.9 billion below the budget request.
enforcement in FY2024, the same as FY2023.
Four other FY2024 spending bills reported by the
Operations Support
committee would rescind about $67 billion of IRA’s
This account funds the operation of the IRS’s infrastructure,
mandatory funds. Some Senate Democrats oppose the cuts.
including research and statistics of income, headquarters
maintenance, information systems development and
Senate Appropriation Committee
operation, and telecommunications.
Markup of S. 2309
On the same day, the Senate Appropriations Committee
The IRS is requesting $4.5 billion for operations support in
marked up a FY2024 FSGG bill (S. 2309) that would
FY2024. Of that amount, $275 million would remain
provide the IRS with $12.3 billion in appropriations, the
available through the end of FY2025; $10 million would
same as the enacted amount for FY2023 and $1.8 billion
remain available until obligated for the construction and
below the budget request.
repair of IRS facilities; and $1 million would remain
available for research through the end of FY2026.
FY2024 IRS Appropriations
H.R. 4664 as reported would provide $4.101 billion for
The requested appropriations for FY2024 are in addition to
operations support in FY2024. It would require the IRS to
any of the $57.5 billion in remaining IRA mandatory funds.
continue to submit quarterly reports to the appropriations
Taxpayer Services
committees on the results of the agency’s major information
technology (IT) investments.
This account pays for prefiling assistance and education,
filing and account services, taxpayer advocacy services, and
S. 2309 would provide $4.101 billion for operations support
associated support costs.
in FY2024, with the same IT reporting mandate.
The IRS is requesting $3.4 billion in appropriations for
Business Systems Modernization
taxpayer services in FY2024. Of this amount, $100 million
This account pays for business systems modernization
would be available through the end of FY2025. Not less
(BSM) program expenses, such as the acquisition of
than $11 million would go to the Tax Counseling for the
information technology systems and related services.
Elderly program; $26 million to low-income taxpayer
program grants; $40 million (available until September 30,
The IRS is requesting $290 million for the program. This
2025) to matching grants for the Community Volunteer
follows a decision by Congress to provide no BSM
Income Tax Assistance program; and $236 million to the
appropriations in FY2023. The decision was based on the
Taxpayer Advocate Service (TAS).
view that the IRS could rely on funds for BSM under IRA
and leftover funds from COVID-19 relief legislation to
H.R. 4664 as reported would provide $2.781 billion for
cover FY2023 expenses.
taxpayer services in FY2024. Not less than $12 million of
that amount would go to the TCE program; $28 million to
BSM funds are used only for the development,
LITC grants; $40 million (until September 30, 2025) to
modernization, and enhancement of the agency’s
VITA matching grants; and $271 million to the TAS.
information technology. Funds from the operations support
account cover the operation and maintenance costs of
S. 2309 as reported would provide the same amount as H.R.
implemented projects.
4664 for taxpayer services in FY2024. Not less than $12
million would go to the TCE program, $26 million for
H.R. 4664 as reported would provide $150 million for the
LITC grants, $41 million (available for two years) for
BSM program in FY2024; the money would be available
VITA grants, and $254 million for the TAS.
until the end of FY2026. It would require the IRS to
Enforcement
provide Congress with quarterly reports on the status and
cost of BSM projects.
This account covers the costs associated with collecting
taxes owed, legal and litigation support, criminal
S. 2309 as reported would provide no funds for the BSM
investigations, and enforcement of tax laws.
program in FY2024.
The IRS is requesting $5.9 billion in enforcement
appropriations for FY2024. Of this amount, $250 million
Gary Guenther, Analyst in Public Finance
would be available through the end of FY2024; $60.3
IF12440
million would go to the Interagency Crime and Drug
Enforcement program; and $25 million would be reserved
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Internal Revenue Service Appropriations, FY2024
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