House votes to rescind billions in funding to the IRS in first major majority action with McCarthy as speaker

The House of Representatives voted to rescind more than $70 billion in funding to the Internal Revenue Service on Monday night, fulfilling newly elected House Speaker Kevin McCarthy’s promise to prevent the agency from hiring tens of thousands of new agents and conducting new audits on Americans. 

The bill — dubbed the Family and Small Business Taxpayer Protection Act and sponsored by Rep. Adrian Smith, R-Neb., and Rep. Michelle Steel, R-Calif. — passed the House of Representatives, 221-210.

The legislation will roll back the billions of dollars of funding for the IRS approved in the Inflation Reduction Act last year but leaves in place funding for customer service and improvements to IT services.

The bill rescinds any funding that could be used to conduct new audits on Americans and funding that would double the agency’s current size.

DEFENSE SPENDING CUTS PROPOSAL SPARKS INTERNAL REPUBLICAN STRIFE

The House of Representatives voted to rescind more than $70 billion of funding to the Internal Revenue Service on Monday night, fulfilling newly elected House Speaker Kevin McCarthy’s promise to prevent the agency from hiring tens of thousands of new agents and conducting new audits on Americans.
(Kent Nishimura / Los Angeles Times via Getty Images)

The Inflation Reduction Act granted an $80 billion boost to the IRS over a 10-year period, with more than half of those funds approved with the intention of helping the agency to crack down on tax evasion. The funding would have gone toward filling 87,000 IRS positions.

“The last thing the American people need right now are more audits from an out-of-control, bloated IRS,” Smith told Fox News Digital on Monday ahead of the vote. “The Inflation Act funding for IRS would lead to the hiring of 87,000 new IRS employees tasked with raising enough revenue to pay for Democrats’ Green New Deal priorities.”

FLASHBACK: MCCARTHY SAYS REPUBLICANS WILL PUT AMERICA ‘IN A NEW DIRECTION’ IF THEY TAKE BACK THE HOUSE

Smith called it “unacceptable.”

The bill — dubbed the Family and Small Business Taxpayer Protection Act — was sponsored by Rep. Adrian Smith, R-Neb., and Rep. Michelle Steel, R-Calif.
(Paul Bersebach/MediaNews Group/Orange County Register via Getty Images)

“Our bill leaves in place funding for customer service and IT improvements because IRS is in desperate need of reform, but it protects middle-class families from audits they cannot afford,” Smith said.

The Congressional Budget Office released a score Monday for the bill, saying on net it would increase the debt by $114 billion over a decade, which Democrats brought up during debate before the vote.

“Congressional Democrats and the Biden administration have made clear that up to 90% of their new audits will target middle-class families and small businesses. This score again demonstrates the extent to which they are plundering working-class Americans in order to hand billions of dollars out to profitable businesses to buy electric trucks for their fleets, fuel for their airplanes and install large scale wind and solar across America’s landscapes,” said a spokesperson for Smith’s office regarding the CBO score.

The vote came just days after McCarthy, R-Calif., secured the House speakership — after an intense 15-round vote battle.

CLICK HERE TO GET THE FOX NEWS APP

Internal Revenue Service headquarters in Washington.
(AP Photo/J. David Ake/File)

McCarthy, in an exclusive interview with Fox News Digital just days before the midterm elections, vowed that if he became speaker of the House, protecting Americans from the IRS would be his first order of business.

“On the very first day, we’ll repeal the 87,000 new IRS agents because we think the government should be there to help you, not to go after you,” McCarthy said.

Fox News’ Kelly Laco and Pete Kasperowicz contributed to this report.