The IRS Stands To Receive an Increased $12.6 Billion Budget From the Omnibus Spending Bill

After years of attempting to make ends meet on a shoestring budget, the IRS stands to receive a $675 million funding increase from the omnibus spending bill passed in the Senate last week.

To stave off an impending government shutdown, federal lawmakers passed a $1.5 trillion funding bill that includes a $12.6 billion budget for the IRS.

With the new funding, the IRS’s budget allocates $2.8 billion for taxpayer services, including the Office of Taxpayer Advocate, and increased hiring; $5.4 billion for enforcement; $4.1 billion for operations support; and $275 million for business systems modernization. All of these amounts constitute increases over the prior year.

According to, the IRS’s budget has been reduced by about 20% over the last decade. During that period the Service’s number of full-time staff fell by nearly 20% as well.

Consequently, the IRS has one person for every 16,000 calls it gets.In addition, the agency faces a current backlog of around 20 million unprocessed returns with a workforce the size of the one it had in 1970 when the IRS was responsible for processing a fraction of the roughly 240 million returns it currently does.

The IRS hopes to get the backlog of unprocessed returns below 1 million by the end of 2022 and develop new automated voice and chatbots to answer taxpayer questions.

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If you have any questions about how to navigate the IRS through these challenging times, please reach out to your local Withum tax professional.