House GOP Proposes Major IRS Funding Cuts, Halting Free Tax Filing Initiative

House Republicans unveiled plans to cut IRS funding by $2.2 billion for the 2025 fiscal year, including halting a newly permanent free online tax filing system. This significant reduction in IRS resources comes as part of a broader budget proposal for the fiscal year starting October 1.

The House Appropriations’ Financial Services and General Government Subcommittee announced the Financial Services and General Government Appropriations bill, proposing $23.608 billion in discretionary spending. This is nearly 20% less than President Joe Biden’s budget request and nearly 10% below the previous year’s spending level.

The bill proposes $11.1 billion for the IRS, a $2.2 billion cut from the previous fiscal year, and reduces enforcement funding by $2 billion. Additionally, the bill prohibits the IRS from using funds to target individuals for exercising First Amendment rights or scrutinizing groups based on ideological beliefs.

This move follows an October report from the House Judiciary Committee and its Select Subcommittee on the Weaponization of the Federal Government, which highlighted alleged civil liberties abuses by the IRS, including targeting conservative groups seeking tax-exempt status.

On May 30, the Treasury Department announced a permanent free online tax filing system, inviting all states and the District of Columbia to participate for the 2025 filing season. However, the new House bill prevents the IRS from using funds to create this government-run tax preparation software unless authorized by Congress.

Rep. David Joyce (R-Ohio), the subcommittee chair, emphasized the bill’s focus on reducing wasteful spending and preventing IRS overreach. In a news release, Joyce said, “This bill reins in wasteful spending and takes steps to prevent agencies like the IRS from unfairly targeting hardworking Americans. By returning these agencies under our jurisdiction to their core missions, this bill guarantees these institutions work for the American people like they were intended to do.”

The proposed cuts have drawn criticism from House Democrats, who argue that the reductions will hinder the IRS’s ability to enforce tax laws and collect revenue.

Rep. Steny Hoyer (D-Md.), the subcommittee’s ranking member, stated, “My colleagues across the aisle claim that fiscal responsibility is another one of their priorities, but this legislation continues their assault on the Internal Revenue Service and its ability to enforce current tax laws and collect legally owed revenue.”

Rep. Rosa DeLauro (D-Conn.), ranking member of the Appropriations Committee, added, “At every turn, Republicans are showing they are willing to do the bidding of the wealthiest Americans and largest corporations with the highest profits.”

The debate over IRS funding reflects broader partisan divides over tax policy and fiscal priorities, with significant implications for the agency’s future operations and the enforcement of tax laws.