Pandemic-Challenged IRS in Line for Big Funding Boost

It has been a challenging year for the IRS, which is dealing with yet another prolonged tax-filing season while also distributing pandemic relief payments to hundreds of millions of people. Those challenges come at a time when the agency has struggled for years to carry out its core duties of auditing returns, collecting taxes, and answering its phones due to underfunding and staffing shortages. President Joe Biden is seeking to reverse these trends through a substantial increase to the IRS’s budget—he asked Congress to boost the agency’s baseline funding by more than 10% to $13.2 billion. The president hopes a bigger budget will allow the IRS to audit more wealthy individuals and corporations and plans to pair the increased enforcement revenue with tax hikes on corporations to pay for his infrastructure plan. In this week’s episode of Talking Tax, reporter Allyson Versprille speaks to former IRS Commissioner John Koskinencq about how years of budget cuts have impacted the IRS and what an increase—like the one requested by the Biden administration—would mean for the agency.