House GOP wants IRS budget cuts to pay for aid to Israel

WASHINGTON — House Republicans on Monday unveiled a proposal to pay for emergency aid for Israel’s war against Hamas by cutting IRS funds aimed at cracking down on rich tax cheats and improving taxpayer service.

The legislation, released by the House Rules Committee, calls for approving roughly $14 billion primarily in military aid to Israel and cutting about the same amount from the IRS budget. President Biden has proposed giving Israel roughly the same amount in aid but did not call for offsetting cuts to other parts of the budget. The new House speaker, Representative Mike Johnson, a Louisiana Republican, has said the new expenditure must be covered by other spending reductions to avoid adding to the debt. Biden also called for the Israel aid to be packaged with roughly $60 billion for Ukraine, an approach the GOP bill rejected.

The legislation reflects the GOP’s ongoing determination to undo the IRS expansion that Biden secured in 2022 in the Inflation Reduction Act, which boosted the agency’s funding by $80 billion to improve taxpayer services and pay for more enforcement actions against wealthy tax cheats. Biden and House Republicans agreed to repeal roughly $20 billion of that $80 billion as part of a deal in May to suspend the US debt ceiling. Now, Republicans are pushing for more reductions.

The GOP bill would pare back funds for most parts of the IRS expansion, including increased enforcement and a new online portal to allow taxpayers to file their taxes for free directly with the government. The legislation excludes cuts to improved taxpayer services, which has helped the IRS reduce wait times for calls.

Using the IRS funding to offset the Israel aid might not actually save money: The nonpartisan Congressional Budget Office had estimated in 2022 that the $80 billion IRS expansion would cut the deficit by more than $100 billion, by improving collections and enforcement.