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IRS faces $20B cut from modernization fund under debt ceiling agreement

May 29, 2023


The IRS is facing substantial cuts to funds meant to rebuild its workforce and modernize its legacy IT systems over the next decade, as part of a deal to raise the debt ceiling and avoid a first-ever government default.

The White House and congressional Republicans reached a final agreement Sunday night to limit federal spending over the next two fiscal years, in exchange for raising the debt limit through January 2025.

Congress still needs to pass the spending plan by June 5 to avoid a federal default. That’s about how long the Treasury Department estimates it still has enough revenue on hand to make scheduled payments, without having to borrow additional funds.

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