Washington, D.C. — United States Senators Elizabeth Warren (D-Mass.), member of the United States Senate Committee on Finance, and Jeff Merkley (D-Ore.) led their colleagues in a letter to U.S. Treasury Secretary Janet Yellen expressing concern that persistent underfunding of the Internal Revenue Service (IRS) will have negative effects on American taxpayers. Warren, Merkley, and their colleagues are calling for a minimum 14% increase in annual IRS funding, and an $80 billion investment in the IRS over 10 years. Years of underinvestment in the IRS, compounded by pandemic-related challenges, have left the agency ill-equipped to assist Americans with basic tax filing needs and crack down on wealthy tax cheats. In fact, recent reporting has detailed how many IRS services could be impaired because of budget constraints and pandemic-related issues. Facing these challenges, the senators are urging Congressional Republicans to rethink their opposition to substantial investments in the IRS – including opposition to the President’s proposal for nearly $80 billion in IRS funding over the next 10 years, which has been included in the Build Back Better Act.
“Your department has warned of a ‘frustrating season’ for taxpayers, including processing and refund delays and issues with other taxpayer services on which millions of Americans rely. These risks come as no surprise after over a decade-long gutting of the IRS budget, which has prevented the agency both from taking action against wealthy tax cheats and providing adequate assistance to the majority of Americans trying to honestly file their taxes,” wrote the senators.
Corporate lobbyists and anti-tax extremists have long pushed to underfund the IRS, crippling the agency’s ability to assist taxpayers. According to IRS Commissioner Charles Rettig, the agency’s FY 2021 budget was $2.7 billion less than its FY 2010 budget in real terms, a 22% reduction. As a result, IRS staffing has also fallen 22% since FY 2010, while the number of tax filers has increased by 14%. During the 2021 tax filing season, IRS assisters answered only one out of every nine calls. Meanwhile, processing delays have left the IRS with a backlog of 10 million returns. Treasury officials have warned taxpayers to expect more of the same, or worse, this year.
The senators continued: “We are glad to be working with the Biden Administration on its proposal to invest nearly $80 billion in the IRS over the next 10 years as part of the Build Back Better Act. As you have emphasized, this funding will allow the IRS to pursue better enforcement with respect to wealthy taxpayers and large corporations, raising at least $2.3 trillion over the next two decades, according to Treasury estimates. But, just as important, this funding will allow the IRS to make transformative investments in taxpayer services, including hiring staff to answer taxpayer calls and process returns and refunds, as well as modernizing IT systems to help taxpayers file their taxes and claim tax credits and refunds.”
The letter is signed by U.S. Senators Edward J. Markey (D-Mass.), Ron Wyden (D-Ore.), Kirsten Gillibrand, Angus King (I-Maine), Sheldon Whitehouse (D-R.I.), Chris Murphy (D-Conn.), Richard Blumenthal (D-Conn.), Tammy Duckworth (D-Ill.), Tom Carper (D-Del.), Tammy Baldwin (D-Wisc.), Alex Padilla (D-Calif.), Bernie Sanders (I-Vt.), and Cory Booker (D-N.J.).
Senator Warren has led the call for increased funding for the IRS. In May 2021, Senator Warren introduced the Restoring the IRS Act of 2021, which would provide the IRS with the resources it needs to crack down on tax dodging by the rich and corporations by providing mandatory funding and strengthening information reporting. In April 2021, during a hearing exchange in the Senate Committee on Finance, IRS Commissioner Rettig agreed with Senator Warren on the need for increased IRS funding.
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