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Hyde-Smith wishes IRS to end diverting tax enforcement funding

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Screengrab from Tax Gap hearing May 19, 2021

On Wednesday, U.S,. Senator Cindy Hyde Smith called into question the practice the IRS is doing of diverting tax enforcement funding while it simultaneously seeks more money for tax code enforcements.

“Since 2013 the IRS has transferred $1 billion away from its tax enforcement account to its operations support  account to address its information technology and systems,” stated Hyde-Smith at a ‘tax gap’ hearing. “Unfortunately, we have seen the IRS repeatedly call attention to the tax gap, and then divert funds elsewhere.”

A ‘skinny budget’ released by the White House shows the President will seek to request a budget increase for the IRS totaling more than $1.2 billion. The administration has also recommended the use of other legislative proposals to provide additional funding.

“While more money always seems to be the proposed solution in Washington, I remain concerned that funding increases marketed as the solution to the tax gap will instead be diverted away from enforcement and squandered on IT projects that have a checkered history of success,” Hyde-Smith said.

Hyde-Smith questioned IRS Commissioner Charles P Retting as well, concerning changes to improve customer service, the agency’s plans for obligating 75% of the $3 billion supplemental appropriations which remains unspent which was provided by congress after the COVID-19 outbreak and the small percentage of staff dedicated to the Criminal Investigations Division.

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