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House Coronavirus Bill Envisions $520 Million for IRS Response

Posted on May 13, 2020

House Democrats want a $520 million boost in IRS funding for the agency’s coronavirus mitigation and the extended filing season.

The 1,800-plus-page Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act (H.R. 6800), released May 12, would inject $3 trillion into the economy, including $599 million to implement direct payments of up to $6,000 per household, according to a summary of the bill compiled by House Appropriations Committee Democrats.

The bill specifies that the additional funds are to be used by the IRS solely for domestic and international coronavirus mitigation efforts in its taxpayer services, enforcement, and operations support business operating divisions.

The IRS postponed the individual return filing and payments deadline from April 15 to July 15.

Mark Mazur, co-director of the Urban-Brookings Tax Policy Center, said that whether $520 million over roughly a year and a half would be enough for IRS coronavirus mitigation “is really unknowable.”

But the HEROES Act is “an important acknowledgment that the work done by the IRS is important, is being done in a difficult environment, and should be funded,” Mazur said.

IRS Acknowledgment

The IRS’s total fiscal 2020 budget is $11.5 billion. That budget provided $5.01 billion for enforcement, $2.5 billion for taxpayer services, and $3.8 billion for operations support.

The bill leaves to the IRS commissioner’s discretion how the additional $520 billion is divided among those functions, with required congressional notice and oversight.

If the IRS can use some of those funds to educate taxpayers about the agency’s economic impact payment compliance terms, and upgrade IT systems needed to deliver those services, “that would be a big plus,” Mazur said.

The HEROES bill also proposes $2.5 million in additional oversight funding for the Treasury Inspector General for Tax Administration.

Further, the bill provides $35 million for oversight of payments to state and local governments by the Treasury inspector general for oversight of the Coronavirus Fiscal Relief Fund.

The bill makes the proposed $520 million for tax agency coronavirus response available through September 2021. The IRS commissioner must notify the House and Senate Appropriations committees of any funds transfer, and of plans for the funds’ use.

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