Filing Your Taxes May Get More Expensive with Israeli Aid Package

( – Republicans are looking to redirect IRS funding to Israel with their latest scheme to pay for the $14.3 billion aid package requested by the Biden administration. House Republicans are demanding that the expense be redirected from items already included in the budget to avoid driving the nation’s deficit to new highs.

Speaker Mike Johnson (R-LA) said his caucus wouldn’t pass the funding otherwise. The House Rules Committee published a bill on Monday, October 30th, that would cut $14 billion from the IRS budget allocation of $67 billion that remained after the Inflation Reduction Act assigned billions to the agency to hire new agents and develop a free system for citizens to file their taxes.

The IRS allocation was intended to help the agency update its systems to improve its ability to detect tax evasion. The cut to fund Israel instead would take money from IRS enforcement, operations, and internal review mechanisms. The only budget items untouched by cuts would be for taxpayer assistance and updating internal systems.

Major tax prep companies like H&R Block and TurboTax have spent millions lobbying against efforts to create a free federal system. A 2002 agreement between the agencies and the federal government resulted in them offering their services for free to taxpayers making less than $73,000/year, but the agreement will expire in 2025.

The agencies were discovered to be coercing folks to pay for their services when they should have been offered for free under the terms of the agreement in a 2019 investigation by ProPublica. Additionally, a report from the Government Accountability Office found that even though 70% of Americans were eligible to use the service for free, only 3% were taking advantage of the offer.

The Biden administration’s stated goals in the free tax filing system were to make it easier for people to file their taxes and for the government to process them. The GOP cut is expected to pass the House, but will likely fail in the Senate where Democrats hold the majority. It will also face a likely veto from President Joe Biden if it somehow passes.

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