Internal Revenue Service Appropriations, FY2022
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Updated March 25, 2022
Internal Revenue Service Appropriations, FY2022
Overview of the Budget Request
The FY2022 budget proposal included $176.1 million to
The Internal Revenue Service (IRS) has two primary
implement numerous changes in how the IRS interacts with
responsibilities: (1) to collect most of the revenue to fund
taxpayers that were mandated by the Taxpayer First Act
federal government agencies and programs, and (2) to
(P.L. 116-25). Among the changes were creating an internet
enforce taxpayer compliance with federal tax laws.
platform for filing Form 1099s, achieving 100% e-filing by
According to the IRS Data Book, in FY2020, the agency
tax-exempt entities, and developing uniform standards for
processed over 240 million tax returns and 3.4 billion
electronic signatures.
information returns, collected nearly $3.5 trillion in gross
The Consolidated Appropriations Act, 2022 (P.L. 117-103)
revenue, and issued $736 billion in refunds to all types of
provides $12,595 million in appropriations for the IRS in
taxpayers.
FY2022 (5.7% more than the FY2021 enacted amount and
The IRS’s operating budget consists mostly of annual
4.3% lower than the budget request). This appropriation
appropriations. In FY2021, 90.5% ($11,919 million) of its
does not include the requested integrity cap adjustment.
operating budget came from appropriations. The remaining
9.5% ($1,248 million) consisted of (1) reimbursements
Table 1. IRS’s FY2021 and FY2022 Appropriations,
from other government agencies for services provided by
Excluding Nonappropriated Funds
the IRS, (2) offsetting collections, (3) user fees, and (4)
(millions of dol ars)
carryovers of unobligated balances from previous fiscal
years. Current law allows the IRS to decide how
FY2021
FY2022
FY2022
nonappropriated funds are used.
Account
Enacted
Request
Enacted
Historically, IRS appropriations have been distributed
TS
$2,556
$2,941
$2,781
among four accounts: taxpayer services (TS), enforcement
ENF
$5,213
$5,463a
$5,438
(ENF), operations support (OS), and business systems
modernization (BSM). As Table 1 shows, enforcement
OS
$3,928
$4,448b
$4,101
accounted for $5,231 million (43.7%) of the $11,919
BSM
$223
$305
$275
million in enacted appropriations for FY2021, followed by
OS (33.0%), TS (21.4%), and BSM (1.9%).
Total
$11,919
$13,157
$12,595
The Biden Administration requested $13,157 million in IRS
Sources: IRS’s FY2022 Budget Justification, Consolidated
appropriations for FY2022, or $1,238 million (10.4%) more
Appropriations Act, 2021 (P.L. 116-260), and Consolidated
than the enacted amount for FY2021. Relative to FY2021,
Appropriations Act, 2022, (P.L. 117-103).
requested BSM funding was $82 million greater; requested
TS funding was $385 million greater; requested OS funding
Notes:
was $520 million greater; and requested ENF funding was
a. Excludes requested new budget authority of $287.5 mil ion as a
$250 million greater.
program integrity cap adjustment.
Table 1 does not include a proposed $417 million program
b. Excludes requested new budget authority of $129.5 mil ion as a
integrity cap adjustment for nondefense discretionary
program integrity cap adjustment.
spending under the Budget Control Act of 2011 (BCA; P.L.
112-25, as amended). In general, such an adjustment would
Main Appropriations Accounts
allow Congress to increase allocations of annual
appropriations for qualified purposes. One such purpose is
Taxpayer Services (TS)
federal agency activities to maintain a program’s “integrity”
This account covers the cost of printing forms and
by enforcing compliance with its regulations. The IRS’s
publications, processing returns, filing and account
enforcement actions are not considered a qualified purpose
services, and taxpayer assistance from the Taxpayer
under current law.
Advocate Service (TAS).
According to budget documents, the proposed $417 million
The Administration requested $2,941 million in FY2022 for
cap adjustment in FY2022, together with the proposed
TS. Of this amount, $11 million was set aside for the Tax
annual cap adjustments through FY2031, would produce a
Counseling for the Elderly (TCE) Program, $13 million for
net revenue gain of $43.6 billion in that period. This
low-income taxpayer clinic (LITC) grants, $30 million
estimate may understate the revenue gain from increased
(through the end of FY2023) for matching grants for the
enforcement, because it does not include any revenue
Community Volunteer Income Tax Assistance (VITA)
increase from the compliance effects of enhanced
Program, and $211 million for the TAS.
enforcement activities.
https://crsreports.congress.gov
Internal Revenue Service Appropriations, FY2022
P.L. 117-103 provides the IRS with $2,781 million for TS
certification that they have no federal tax debt; and up to $5
in FY2022 (8.8% more than the FY2021 enacted amount
million is available for reducing the IRS’s backlog of tax
and 5.4% less than the budget request). The act specifies
returns and taxpayer correspondence (in addition to funding
that $100 million of that amount shall be available for
for that purpose under the TS account).
obligation through the end of FY2023. In addition, $11
million is set aside for TCE, $13 million for LITC grants,
The act also requires the IRS to submit quarterly reports to
$30 million for VITA program matching grants, and $221
the appropriations committees and the U.S. Comptroller
million for the TAS ($5.5 million of which is to be used for
General on the cost, results, and status of technology
cases involving identity theft and refund fraud).
modernization projects.
Enforcement (ENF)
Business Systems Modernization (BSM)
This account pays for expenses related to assessing and
This account pays for costs related to upgrading various
collecting taxes owed, providing legal support, and
IRS information technology (IT) systems.
conducting criminal investigations.
Under the Administration’s budget request, the BSM
The Administration requested $5,463 million in
program would have received $305 million in
appropriations for IRS enforcement activities in FY2022.
appropriations for FY2022. The requested funds were to be
Of this amount, $21 million was set aside to purchase new
available for acquiring and implementing new IT systems
technology for the IRS’s Criminal Investigation Division
through the end of FY2024.
(CID). The budget request also called for $287.5 million in
new budget authority under the BCA to shrink the federal
The budget request also required the IRS to submit
tax gap, which is the difference between taxes owed and
quarterly reports to the Senate and House appropriations
taxes paid in full on time. (According to the IRS, the
committees and the U.S. Comptroller General on its major
FY2019 net tax gap was $554 billion.)
IT investments.
P.L. 117-103 provides $5,438 million for ENF (4.3% more
P.L. 117-103 provides $275 million for the BSM program
than the FY2021 enacted amount and 0.5% less than the
(23.3% more than the FY2021 enacted amount and 9.8%
budget request). Of that amount, $250 million is available
less than the budget request). The funds are available for
for obligation through the end of FY2023; $60.3 million is
acquiring new IT systems through the end of FY2024. The
set aside for the Interagency Crime and Drug Enforcement
act requires the IRS to submit reports on various aspects of
Program; and up to $21 million is to be used to acquire new
its IT investments under the Integrated Modernization
“investigative technology” for the CID (in addition to its
Business Plan to the appropriations committees and the
funding under OS). In an atypical move, the act reserves up
U.S. Comptroller General.
to $75 million from the ENF account for reducing the IRS’s
Policy Riders
backlog of unprocessed tax returns and unanswered
taxpayer correspondence.
P.L. 117-103 contains 11 policy riders for the IRS. The first
10 have appeared from year to year for some time. They
Operations Support (OS)
address such matters as limits on transfers of appropriated
This account covers expenses associated with facility
funds among IRS’s accounts, an employee training program
services (including rent); postage; telecommunications;
focused on taxpayer rights, protecting the confidentiality of
security at IRS facilities; research; and the maintenance,
taxpayer information, and resources for “sufficient and
security, and upgrade of agency information systems.
effective 1-800 help line service for taxpayers.”
The Administration requested $4,448 million in
The 11th rider concerns a matter not regularly addressed in
appropriations for OS in FY2022. Of this amount, $275
IRS appropriations legislation. It gives the IRS the authority
million was available for obligation through the end of
to use FY2022 funds to hire employees, “without regard to
FY2023; $10 million was set aside (until spent) for the
any notice or preference requirements,” for a specific
construction, renovation, and repair of IRS facilities; $1
purpose: to help process “backlogged tax returns and return
million was reserved through FY2023 for research; and $10
information.”
million was set aside for developing a system to allow
federal contractors to electronically certify that they do or
This authority seems to complement the direct-hire
do not have seriously delinquent federal tax debt.
authority for 10,000 entry-level positions that the Office of
The budget request included $129.5 million in new budget
Personnel Management recently granted to the IRS through
authority for OS investments linked to enforcement actions
the end of 2023. Hiring that many employees would expand
targeting the federal tax gap.
the IRS workforce by 14%. The IRS plans to use funds
from its current budget to pay for the new hires. It is
P.L. 117-103 provides $4,101 million for OS (4.4% more
unclear whether the IRS will offer competitive salaries for
than the FY2021 enacted amount and 7.8% less than the
those positions.
budget request). Of that amount, $275 million is available
for obligation through the end of FY2023; $10 million is set
aside for the construction and repair of IRS facilities (until
spent); $1 million is available for research through the end
Gary Guenther, Analyst in Public Finance
of FY2024; $10 million is reserved (until spent) for
developing a system for federal contractors to obtain IRS
IF11979
https://crsreports.congress.gov
Internal Revenue Service Appropriations, FY2022
Disclaimer
This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan shared staff to
congressional committees and Members of Congress. It operates solely at the behest of and under the direction of Congress.
Information in a CRS Report should not be relied upon for purposes other than public understanding of information that has
been provided by CRS to Members of Congress in connection with CRS’s institutional role. CRS Reports, as a work of the
United States Government, are not subject to copyright protection in the United States. Any CRS Report may be
reproduced and distributed in its entirety without permission from CRS. However, as a CRS Report may include
copyrighted images or material from a third party, you may need to obtain the permission of the copyright holder if you
wish to copy or otherwise use copyrighted material.
https://crsreports.congress.gov | IF11979 · VERSION 4 · UPDATED
Updated March 25, 2022
Internal Revenue Service Appropriations, FY2022
Overview of the Budget Request
The FY2022 budget proposal included $176.1 million to
The Internal Revenue Service (IRS) has two primary
implement numerous changes in how the IRS interacts with
responsibilities: (1) to collect most of the revenue to fund
taxpayers that were mandated by the Taxpayer First Act
federal government agencies and programs, and (2) to
(P.L. 116-25). Among the changes were creating an internet
enforce taxpayer compliance with federal tax laws.
platform for filing Form 1099s, achieving 100% e-filing by
According to the IRS Data Book, in FY2020, the agency
tax-exempt entities, and developing uniform standards for
processed over 240 million tax returns and 3.4 billion
electronic signatures.
information returns, collected nearly $3.5 trillion in gross
The Consolidated Appropriations Act, 2022 (P.L. 117-103)
revenue, and issued $736 billion in refunds to all types of
provides $12,595 million in appropriations for the IRS in
taxpayers.
FY2022 (5.7% more than the FY2021 enacted amount and
The IRS’s operating budget consists mostly of annual
4.3% lower than the budget request). This appropriation
appropriations. In FY2021, 90.5% ($11,919 million) of its
does not include the requested integrity cap adjustment.
operating budget came from appropriations. The remaining
9.5% ($1,248 million) consisted of (1) reimbursements
Table 1. IRS’s FY2021 and FY2022 Appropriations,
from other government agencies for services provided by
Excluding Nonappropriated Funds
the IRS, (2) offsetting collections, (3) user fees, and (4)
(millions of dol ars)
carryovers of unobligated balances from previous fiscal
years. Current law allows the IRS to decide how
FY2021
FY2022
FY2022
nonappropriated funds are used.
Account
Enacted
Request
Enacted
Historically, IRS appropriations have been distributed
TS
$2,556
$2,941
$2,781
among four accounts: taxpayer services (TS), enforcement
ENF
$5,213
$5,463a
$5,438
(ENF), operations support (OS), and business systems
modernization (BSM). As Table 1 shows, enforcement
OS
$3,928
$4,448b
$4,101
accounted for $5,231 million (43.7%) of the $11,919
BSM
$223
$305
$275
million in enacted appropriations for FY2021, followed by
OS (33.0%), TS (21.4%), and BSM (1.9%).
Total
$11,919
$13,157
$12,595
The Biden Administration requested $13,157 million in IRS
Sources: IRS’s FY2022 Budget Justification, Consolidated
appropriations for FY2022, or $1,238 million (10.4%) more
Appropriations Act, 2021 (P.L. 116-260), and Consolidated
than the enacted amount for FY2021. Relative to FY2021,
Appropriations Act, 2022, (P.L. 117-103).
requested BSM funding was $82 million greater; requested
TS funding was $385 million greater; requested OS funding
Notes:
was $520 million greater; and requested ENF funding was
a. Excludes requested new budget authority of $287.5 mil ion as a
$250 million greater.
program integrity cap adjustment.
Table 1 does not include a proposed $417 million program
b. Excludes requested new budget authority of $129.5 mil ion as a
integrity cap adjustment for nondefense discretionary
program integrity cap adjustment.
spending under the Budget Control Act of 2011 (BCA; P.L.
112-25, as amended). In general, such an adjustment would
Main Appropriations Accounts
allow Congress to increase allocations of annual
appropriations for qualified purposes. One such purpose is
Taxpayer Services (TS)
federal agency activities to maintain a program’s “integrity”
This account covers the cost of printing forms and
by enforcing compliance with its regulations. The IRS’s
publications, processing returns, filing and account
enforcement actions are not considered a qualified purpose
services, and taxpayer assistance from the Taxpayer
under current law.
Advocate Service (TAS).
According to budget documents, the proposed $417 million
The Administration requested $2,941 million in FY2022 for
cap adjustment in FY2022, together with the proposed
TS. Of this amount, $11 million was set aside for the Tax
annual cap adjustments through FY2031, would produce a
Counseling for the Elderly (TCE) Program, $13 million for
net revenue gain of $43.6 billion in that period. This
low-income taxpayer clinic (LITC) grants, $30 million
estimate may understate the revenue gain from increased
(through the end of FY2023) for matching grants for the
enforcement, because it does not include any revenue
Community Volunteer Income Tax Assistance (VITA)
increase from the compliance effects of enhanced
Program, and $211 million for the TAS.
enforcement activities.
https://crsreports.congress.gov
Internal Revenue Service Appropriations, FY2022
P.L. 117-103 provides the IRS with $2,781 million for TS
certification that they have no federal tax debt; and up to $5
in FY2022 (8.8% more than the FY2021 enacted amount
million is available for reducing the IRS’s backlog of tax
and 5.4% less than the budget request). The act specifies
returns and taxpayer correspondence (in addition to funding
that $100 million of that amount shall be available for
for that purpose under the TS account).
obligation through the end of FY2023. In addition, $11
million is set aside for TCE, $13 million for LITC grants,
The act also requires the IRS to submit quarterly reports to
$30 million for VITA program matching grants, and $221
the appropriations committees and the U.S. Comptroller
million for the TAS ($5.5 million of which is to be used for
General on the cost, results, and status of technology
cases involving identity theft and refund fraud).
modernization projects.
Enforcement (ENF)
Business Systems Modernization (BSM)
This account pays for expenses related to assessing and
This account pays for costs related to upgrading various
collecting taxes owed, providing legal support, and
IRS information technology (IT) systems.
conducting criminal investigations.
Under the Administration’s budget request, the BSM
The Administration requested $5,463 million in
program would have received $305 million in
appropriations for IRS enforcement activities in FY2022.
appropriations for FY2022. The requested funds were to be
Of this amount, $21 million was set aside to purchase new
available for acquiring and implementing new IT systems
technology for the IRS’s Criminal Investigation Division
through the end of FY2024.
(CID). The budget request also called for $287.5 million in
new budget authority under the BCA to shrink the federal
The budget request also required the IRS to submit
tax gap, which is the difference between taxes owed and
quarterly reports to the Senate and House appropriations
taxes paid in full on time. (According to the IRS, the
committees and the U.S. Comptroller General on its major
FY2019 net tax gap was $554 billion.)
IT investments.
P.L. 117-103 provides $5,438 million for ENF (4.3% more
P.L. 117-103 provides $275 million for the BSM program
than the FY2021 enacted amount and 0.5% less than the
(23.3% more than the FY2021 enacted amount and 9.8%
budget request). Of that amount, $250 million is available
less than the budget request). The funds are available for
for obligation through the end of FY2023; $60.3 million is
acquiring new IT systems through the end of FY2024. The
set aside for the Interagency Crime and Drug Enforcement
act requires the IRS to submit reports on various aspects of
Program; and up to $21 million is to be used to acquire new
its IT investments under the Integrated Modernization
“investigative technology” for the CID (in addition to its
Business Plan to the appropriations committees and the
funding under OS). In an atypical move, the act reserves up
U.S. Comptroller General.
to $75 million from the ENF account for reducing the IRS’s
Policy Riders
backlog of unprocessed tax returns and unanswered
taxpayer correspondence.
P.L. 117-103 contains 11 policy riders for the IRS. The first
10 have appeared from year to year for some time. They
Operations Support (OS)
address such matters as limits on transfers of appropriated
This account covers expenses associated with facility
funds among IRS’s accounts, an employee training program
services (including rent); postage; telecommunications;
focused on taxpayer rights, protecting the confidentiality of
security at IRS facilities; research; and the maintenance,
taxpayer information, and resources for “sufficient and
security, and upgrade of agency information systems.
effective 1-800 help line service for taxpayers.”
The Administration requested $4,448 million in
The 11th rider concerns a matter not regularly addressed in
appropriations for OS in FY2022. Of this amount, $275
IRS appropriations legislation. It gives the IRS the authority
million was available for obligation through the end of
to use FY2022 funds to hire employees, “without regard to
FY2023; $10 million was set aside (until spent) for the
any notice or preference requirements,” for a specific
construction, renovation, and repair of IRS facilities; $1
purpose: to help process “backlogged tax returns and return
million was reserved through FY2023 for research; and $10
information.”
million was set aside for developing a system to allow
federal contractors to electronically certify that they do or
This authority seems to complement the direct-hire
do not have seriously delinquent federal tax debt.
authority for 10,000 entry-level positions that the Office of
The budget request included $129.5 million in new budget
Personnel Management recently granted to the IRS through
authority for OS investments linked to enforcement actions
the end of 2023. Hiring that many employees would expand
targeting the federal tax gap.
the IRS workforce by 14%. The IRS plans to use funds
from its current budget to pay for the new hires. It is
P.L. 117-103 provides $4,101 million for OS (4.4% more
unclear whether the IRS will offer competitive salaries for
than the FY2021 enacted amount and 7.8% less than the
those positions.
budget request). Of that amount, $275 million is available
for obligation through the end of FY2023; $10 million is set
aside for the construction and repair of IRS facilities (until
spent); $1 million is available for research through the end
Gary Guenther, Analyst in Public Finance
of FY2024; $10 million is reserved (until spent) for
developing a system for federal contractors to obtain IRS
IF11979
https://crsreports.congress.gov
Internal Revenue Service Appropriations, FY2022
Disclaimer
This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan shared staff to
congressional committees and Members of Congress. It operates solely at the behest of and under the direction of Congress.
Information in a CRS Report should not be relied upon for purposes other than public understanding of information that has
been provided by CRS to Members of Congress in connection with CRS’s institutional role. CRS Reports, as a work of the
United States Government, are not subject to copyright protection in the United States. Any CRS Report may be
reproduced and distributed in its entirety without permission from CRS. However, as a CRS Report may include
copyrighted images or material from a third party, you may need to obtain the permission of the copyright holder if you
wish to copy or otherwise use copyrighted material.
https://crsreports.congress.gov | IF11979 · VERSION 4 · UPDATED