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HR 196 · 119th CongressIn Committee
Family and Small Business Taxpayer Protection Act
Latest updateJan 3, 2025
Referred to the House Committee on Ways and Means.
Taxation
Sponsor
Adrian Smith
Introduced
January 3, 2025
Latest action
January 3, 2025
Legislative Progress
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Latest Action
Referred to the House Committee on Ways and Means.
Plain-Language Summary
AI GeneratedThe Inflation Reduction Act of 2022 provided the Internal Revenue Service with approximately $80 billion in new funding over ten years to enhance tax enforcement, modernize aging computer systems, and expand customer service operations. This funding was appropriated through multiple budget categories covering enforcement activities, information technology infrastructure, customer service improvements, and administrative expenses. The IRS has not yet fully obligated all of these funds, leaving unspent balances available in the agency's accounts as of early 2025.
This bill directs the rescission—or cancellation—of all unobligated balances from the specific funding categories provided by the Inflation Reduction Act. The action eliminates any remaining funds that the IRS has not yet committed to specific projects or operations under those appropriations. By rescinding these balances, the bill prevents the IRS from accessing this money for any future use, effectively reducing the agency's available budget authority regardless of how much of the original $80 billion has already been spent on ongoing programs.
The rescission takes effect upon enactment, immediately freezing access to any unspent Inflation Reduction Act funds. The cancelled balances revert to the U.S. Treasury, reducing the federal deficit by the amount rescinded. This action does not affect IRS funding from other sources or appropriations made before the Inflation Reduction Act. However, it constrains the agency's ability to complete planned enforcement hiring, technology upgrades, and service improvements that were designed to operate over the full ten-year period, potentially extending timelines for those initiatives or requiring reallocation from other budget categories.
Key Provisions
- 1Rescind all unobligated balances from seven specific funding categories established by the Inflation Reduction Act of 2022 for Internal Revenue Service operations.
- 2Eliminate access to remaining funds appropriated for IRS enforcement activities, information technology modernization, customer service, and administrative expenses under the 2022 law.
- 3Return cancelled balances to the U.S. Treasury, effective upon the bill's enactment, reducing the federal deficit by the amount of funds rescinded.
- 4Preserve all Internal Revenue Service funding from appropriations sources other than the Inflation Reduction Act, leaving non-IRA budgets unaffected by this rescission.
★ Why this matters
The bill immediately reduces the Internal Revenue Service's available budget by cancelling unspent funds from the 2022 Inflation Reduction Act. This constrains the agency's ability to complete planned hiring of enforcement staff, upgrade decades-old computer systems, and expand customer service operations over the remainder of the ten-year funding period. The rescission reduces federal spending and the deficit but may slow tax compliance efforts and delay technology modernization projects already underway.
● Who this affects
Taxpayers filing returns and seeking IRS assistance, as customer service wait times and response delays may increase if staffing and technology upgrades are postponed. Small business owners and self-employed individuals who rely on IRS guidance and audit support. Internal Revenue Service employees and contractors hired or planned under the Inflation Reduction Act funding, who may face hiring freezes or reduced hours. The federal government's deficit reduction efforts, as rescinded funds lower overall spending. Tax compliance rates across the economy, as reduced enforcement resources may affect audit capacity and voluntary compliance.
Bill Text
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<DOC>
119th CONGRESS
1st Session
H. R. 196
To rescind certain balances made available to the Internal Revenue
Service.
IN THE HOUSE OF REPRESENTATIVES
January 3, 2025
Mr. Smith of Nebraska (for himself, Mr. Moran, Mr. Kelly of
Pennsylvania, Ms. Tenney, Mr. Hudson, Ms. Malliotakis, Mrs. Miller of
West Virginia, Mr. Crenshaw, Mr. Buchanan, Mr. Meuser, Mr. Finstad, Ms.
Salazar, Mr. Grothman, Mrs. Cammack, Mr. Guest, Mr. Higgins of
Louisiana, Ms. Van Duyne, Mr. Bacon, Mr. Reschenthaler, Mr. Griffith,
Mr. Estes, Mr. Bost, Mr. Moolenaar, Mr. Feenstra, Mr. Stauber, Mrs.
Harshbarger, Mr. Murphy, Mr. Langworthy, Mr. Fulcher, Mr. Cline, Ms.
Letlow, and Mr. Ellzey) introduced the following bill; which was
referred to the Committee on Ways and Means
A BILL
To rescind certain balances made available to the Internal Revenue
Service.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Family and Small Business Taxpayer
Protection Act''.
SEC. 2. RESCISSION OF CERTAIN BALANCES MADE AVAILABLE TO THE INTERNAL
REVENUE SERVICE.
The unobligated balances of amounts appropriated or otherwise made
available for activities of the Internal Revenue Service by paragraphs
(1)(A)(ii), (1)(A)(iii), (1)(B), (2), (3), (4), and (5) of section
10301 of Public Law 117-169 (commonly known as the ``Inflation
Reduction Act of 2022'') as of the date of the enactment of this Act
are rescinded.
<all>Party Positions
36 members formally cosponsored
Democratic Party
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Source: cosponsors
Republican Party
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36 members formally endorsed
Cosponsored this bill
Source: cosponsors
Cosponsor data and vote records sourced from Congress.gov. Reflects formal legislative actions only.