Future Plans for the IRS Following Commissioner Billy Long's Exit
The IRS is facing a period of uncertainty, with significant changes in funding and leadership that could impact the agency's operations and future modernization efforts.
The Inflation Reduction Act (IRA) of 2022 initially allocated $79.4 billion to the IRS to enhance various services, including modernizing its systems to enforce tax laws more effectively. However, the funding has been cut in half, with approximately $37.6 billion remaining as of March 2025, according to the U.S. Treasury Inspector General for Tax Administration.
The House Appropriations Subcommittee has proposed further reductions for the fiscal year 2026, cutting the IRS's funding from $12.3 billion in FY 2025 to $9.5 billion. However, Senate Democrats support a higher funding level, offering a glimmer of hope for the agency.
The reduced funding and political uncertainty have already had an impact on the IRS. The Transformation and Strategy Office, responsible for modernization efforts, has been shut down, signaling a potential slowdown or realignment of long-term initiatives.
The removal of Commissioner Billy Long, who was nominated by President Trump in 2024 and approved by the Senate in June 2025, adds to the agency's challenges. Long's tax experience was deemed limited by ProPublica, and he had co-sponsored bills to repeal the income taxes and abolish the IRS in the past.
Trump continues to question the integrity and usefulness of the IRS, threatening to dismantle the agency or propose substantial layoffs. This stance, along with the ongoing political gridlock, makes additional appropriations uncertain, and further rescissions may be likely, increasing the risk to IRS operations and modernization plans.
The IRS is now at a crossroads where reduced funding and the removal of Commissioner Long could hamper the agency’s ability to continue key transformation projects and enforce tax laws effectively, especially if political deadlock persists into late 2025 and beyond.
[1] U.S. Treasury Inspector General for Tax Administration, Congressional Budget Office, Forbes, Wall Street Journal [2] House Appropriations Subcommittee, Senate Democrats, Tax Policy Center
The funding cuts to the IRS through the Inflation Reduction Act and proposed reductions for the fiscal year 2026 by the House Appropriations Subcommittee, combined with the removal of Commissioner Billy Long and Trump's threats to dismantle the agency, have raised concerns about the IRS's ability to modernize its systems and enforce tax laws effectively, as reported by various policy-and-legislation and general-news sources such as the U.S. Treasury Inspector General for Tax Administration, Forbes, Wall Street Journal, the House Appropriations Subcommittee, Senate Democrats, and the Tax Policy Center. In the midst of this political uncertainty and policy debates, the IRS Commissioner's position remains vacant, adding to the uncertainties surrounding the IRS's future operations.
