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CBO Estimates Bill to Defund IRS Would Cost $114 Billion

JAN. 9, 2023

CBO Estimates Bill to Defund IRS Would Cost $114 Billion

DATED JAN. 9, 2023
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Congressional Budget Office

Cost Estimate

January 9, 2023

Estimated Budgetary Effects of H.R. 23, the Family and Small Business Taxpayer Protection Act, as Posted on the Website of the Clerk of the House of Representatives on January 9, 2023 as an Item That May Be Considered Pursuant to a Rule

The Statutory Pay-As-You-Go Act of 2010 establishes budget-reporting and enforcement procedures for legislation affecting direct spending or revenues. The net changes in outlays and revenues that are subject to those procedures are shown above.

The Congressional Budget Office adheres to laws and Congressional rules concerning the federal budget and to a set of principles (called the Scorekeeping Guidelines) created by the Congress. Those principles guide how the House and Senate Budget Committees, the Congressional Budget Office, and the Office of Management and Budget attribute budgetary effects to legislation, with the goal of promoting consistent treatment of estimated effects among those agencies. (For more information on those guidelines, see Congressional Budget Office, CBO Explains Budgetary Scorekeeping Guidelines, January 2021, www.cbo.gov/publication/56507.)

When a provision in an authorization bill provides funding for administrative or program management activities, such as when the IRS receives additional funding for administrative activities, spending of those amounts can result in increases in receipts. Guideline 14, however, directs scorekeepers to exclude those increases when estimating the budgetary effects of proposals that would provide additional mandatory funding for such activities.

Guideline 14 was adopted in part to avert cases in which possible, but uncertain, receipts were used to offset near-term increases in spending resulting from the same bill. That guideline is asymmetrical, however. That is, even though increased receipts cannot be credited to a bill that would increase administrative funding, estimated receipt losses that might result from a decrease in such funding are included in the estimated budgetary effects.

H.R. 23 would rescind unobligated funds provided by paragraphs (1)(A)(ii), (1)(A)(iii), (1)(B), (2), (3), (4), and (5) of section 10301 of Public Law 117–169. CBO estimates that the bill would decrease outlays by $71 billion and decrease receipts by $186 billion over the 2023-2032 period. Both of those effects are included in accordance with Guideline 14.

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