Rescind the unobligated balances of amounts appropriated for Internal Revenue Service enhancements and use such funding for an External Revenue Service.

This bill would take back IRS money that hasn’t been spent yet from the Inflation Reduction Act. That includes funds for tax enforcement, taxpayer services, operations, technology upgrades, and a study on a free direct e‑file system. It would also pull back unspent funds for the Treasury tax watchdog, the Office of Tax Policy, the U.S. Tax Court, and Treasury offices that oversee the IRS. Congress also says the same amount of money should instead go to build and run a new “External Revenue Service.”

In everyday terms, this could mean fewer new IRS resources for audits, customer support, and modernized systems. It could also slow or stop work on a possible free government e‑filing option. If the new “External Revenue Service” is funded later, some of this work could shift there, but the bill does not spell out how that would operate.

• Key points
  • Who is affected: Taxpayers who use IRS services; IRS and related tax agencies and courts.
  • What changes: Unspent IRS funds from the Inflation Reduction Act would be canceled; Congress urges directing equal funds to create an External Revenue Service.
  • When: Timing is not specified in the text; it would occur if enacted into law.