The four-day partial government shutdown – which did not impact the Internal Revenue Service – ended yesterday after the House passed, and the President signed, a funding package approved by the Senate just prior to the shutdown. The funding deal includes $11.2 billion to fund the IRS for FY2026, a 9 percent cut from the agency’s $12.3 billion budget for FY2025.
The IRS FY2026 budget includes a $941 million cut (23 percent) to its technology and operations unit and a $439 million cut (8 percent) for enforcement activities. This cut brings the annual enforcement budget below $5 billion for the first time since 2021.
The funding package also includes, as expected, a $11.7 billion recission of $80 billion allocated to the IRS in 2022 through the Inflation Reduction Act. This clawback, combined with a number of prior recissions of IRA funding over the last three years, leaves only $10 billion remaining of the original $80 billion total.
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