IRS recovers $4.7 billion in taxes from scofflaws. But it’s bracing for funding cuts under Trump

Republicans have long called for rescinding tens of billions of dollars in funding provided to the IRS under the Inflation Reduction Act. IRS leadership on Thursday announced that the agency has recovered $4.7 billion in back taxes and proceeds from a variety of crimes since the nation’s tax collector received a massive influx of funding through Democrats’ flagship tax, climate and health law in 2022. On a call with reporters to preview the announcement, IRS Commissioner Danny Werfel said improvements made to the agency during his term will help the incoming administration and new Republican-majority Congress achieve the goal of administering an extension of the 2017 Tax Cuts and Jobs Act. “We know there are serious discussions about a major tax bill coming out of the next Congress,” Werfel said, “and with the improvements we’ve made since I’ve been here, I’m quite confident the IRS will be well positioned to deliver on whatever new tax law that Congress passes.” Tax collections announced Thursday include $1.3 billion from high-income taxpayers who did not pay overdue tax debts, $2.9 billion related to IRS criminal investigations into crimes such as drug trafficking and terrorist financing, and $475 million in proceeds from criminal and civil cases that came from whistleblower information. Democrats like Sen. Ron Wyden have called Long’s nomination “a bizarre choice” since Long “jumped into the scam-plagued industry involving the Employee Retention Tax Credit.” Trump said on his social media site, “Taxpayers and the wonderful employees of the IRS will love having Billy at the helm.” Werfel’s term is set to end in 2027, and he has not indicated whether he plans to step down from his role before Trump’s inauguration.