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IRS Faces New Restrictions and Budget Cuts in Spending Bill

By Ryan Ellis

Today, the U.S. House will take up H.R. 5485, FY 2017 “Financial Services and General Government Appropriations Act.”Among other things, this is the appropriations bill which funds our friends at the IRS.

From a limited government perspective, this bill is a big win for taxpayers. First and foremost, it cuts IRS spending down to $10.9 billion, $236 million below last year’s approved level and $2.7 billion below the president’s request. Basically, this backs out the one-time spending approved last year to fight identity theft and continues a hard budget freeze at the agency.

Keeping spending at this level means that the IRS will have to prioritize their resources away from things like Obamacare implementation and harassing ordinary families and small businesses. The IRS will still have plenty of money to go after actual criminals and tax cheats, but hopefully not enough money for fishing expeditions elsewhere.

There are also several important policy riders attached to this bill which will help constrain the IRS from any more Lois Lerner-type inappropriate political activities. These include:

  • Prohibiting the IRS from finalizing regulations regarding the tax-exempt status of 501(c)(4) groups. The fear here is that these rules will be used to unfairly target conservative non-profits

  • Prohibiting bonuses and awards to IRS employees unless conduct and tax compliance is given consideration

  • Prohibiting the IRS from targeting organizations for their political beliefs and citizens for exercising their First Amendment rights

  • Prohibiting funds for inappropriate videos and conferences (anyone remember the Star Trek video?)

  • Prohibiting the White House from directing an IRS investigation of an organization

  • Prohibiting the transfer of funds to the IRS for Obamacare implementation

  • Prohibiting funds to implement Obamacare’s individual mandate

  • Prohibiting the IRS from auditing a church

Taken together, this appropriations bill is a great win for taxpayers. It cuts the IRS budget, stops any shenanigans with common sense riders, and takes the IRS teeth out of Obamacare. It’s a good example of why passing appropriations bills through regular order is a good idea and leads to optimal conservative outcomes.

Read here.

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