S-4298-119
Read twice and referred to the Committee on Finance.
Sponsored by Angus King (I-ME)
What it does
This bill would appropriate approximately $80.2 billion in additional funding to the IRS over six fiscal years (2026–2031), divided across four categories: tax enforcement ($45.6B), taxpayer services ($9.6B), technology and operations support ($25.4B), and business systems modernization ($3.1B). It would also require the IRS Commissioner to submit biennial reports to Congress detailing plans and progress toward shifting enforcement resources toward high-income individuals and large corporations, and require the Treasury Inspector General for Tax Administration to independently evaluate those plans.
Who benefits
Compliant taxpayers who bear a disproportionate share of the tax burden relative to those who underreport — they would benefit if the "tax gap" (the difference between taxes owed and taxes collected) narrows. Taxpayers who contact the IRS for assistance would benefit from improved services and modernized systems. Federal programs funded by increased tax revenue would benefit indirectly. IRS employees and contractors hired under the expansion would benefit directly. Technology vendors contracted for modernization work would benefit.
Who is hurt
High-income individuals and large corporations would face increased audit rates and enforcement scrutiny, as the bill explicitly directs enforcement resources toward them. Tax attorneys, accountants, and advisors whose clients are in those groups may face increased compliance costs passed through to clients. Small businesses that interact with a more active IRS may face increased administrative burden even if not the primary enforcement target. Taxpayers who have previously benefited from low audit rates due to IRS resource constraints would face greater scrutiny.
Supporters argue
Supporters argue that the IRS currently collects roughly $600 billion less per year than is legally owed — a "tax gap" documented by IRS estimates — and that chronic underfunding has left the agency unable to audit complex returns filed by wealthy individuals and corporations. They contend that every dollar spent on IRS enforcement historically returns several dollars in collected revenue, citing IRS data showing enforcement activities yield a positive return on investment, and that restoring audit capacity is necessary to ensure the tax code applies equally regardless of income level.
Opponents argue
Opponents argue that dramatically expanding IRS enforcement capacity risks subjecting ordinary taxpayers and small businesses to increased audits and compliance burdens, despite the bill's stated focus on high earners and corporations. They contend that the IRS has a documented history of mismanaging large technology investments — including prior modernization failures spanning decades — and that appropriating tens of billions without stronger structural accountability measures may repeat those failures rather than close the tax gap.