Function 800 - General Government

Increase Appropriations for the Internal Revenue Service’s Enforcement Initiatives

CBO periodically issues a compendium of policy options (called Options for Reducing the Deficit) covering a broad range of issues, as well as separate reports that include options for changing federal tax and spending policies in particular areas. This option appears in one of those publications. The options are derived from many sources and reflect a range of possibilities. For each option, CBO presents an estimate of its effects on the budget but makes no recommendations. Inclusion or exclusion of any particular option does not imply an endorsement or rejection by CBO.

Billions of Dollars 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2021–
Change in Outlays 0.5 1.0 1.5 2.0 2.5 2.5 2.5 2.5 2.5 2.5 7.5 20.0
Change in Revenues 0.3 1.5 3.3 5.1 6.8 8.1 8.8 9.0 8.9 8.8 17.1 60.6
  Increase or Decrease (-) in the Deficit 0.2 -0.5 -1.8 -3.1 -4.3 -5.6 -6.3 -6.5 -6.4 -6.3 -9.6 -40.6

This option would take effect in October 2021.
Because of the budget scorekeeping guidelines used by the Congress, the revenue changes attributable to this option would not be counted for budget enforcement purposes. However, if an appropriation bill or another bill providing funding for this option was enacted, the Congressional Budget Office’s next projection of the budget deficit would incorporate its effects on revenues.

The Internal Revenue Service (IRS) undertakes a variety of enforcement activities (including audits) to improve compliance with the tax system. Increasing funding for enforcement (often referred to as a program integrity initiative) would, in the Congressional Budget Office’s estimation, boost federal revenues.

This option would gradually increase the IRS’s funding for enforcement. Funding would rise by $500 million each year for the first five years and then remain at an additional $2.5 billion per year from 2026 to 2030. Each infusion of new funding would result in the start of new enforcement initiatives—expansions of audits and other activities that could improve compliance with the tax system. All the new initiatives would continue to be funded at the same level and would remain in effect through 2030 and beyond.