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Treasury secretary defends steep IRS IT cuts as members warn revenue risk
Summary
Secretary Scott Bissett told the subcommittee the IRS has been "30 years behind" on IT modernization and the department achieved $2 billion in IT savings, while lawmakers warned reductions in enforcement staff could reduce revenue and compliance.
Treasury Secretary Scott Bissett told the House Appropriations subcommittee that the Treasury Department is pursuing large savings in IRS information technology and administrative costs while planning to right‑size personnel levels.
"The IRS is 30 years behind 30 years behind on an IT modernization project, where perhaps up to $50,000,000,000 of taxpayer money has been wasted," Bissett said. He told the committee Treasury trimmed about $2,000,000,000 from the IRS IT budget through contract renegotiations and eliminating unused licenses.
Members from both parties pressed the secretary on how proposed budget reductions could affect enforcement and long‑term revenue collection. Representative Bishop cited outside estimates that deep staff cuts in enforcement could yield tens of billions in foregone revenue: "A recent study concluded that this would result in a loss of $19,000,000,000 in foregone revenue just in 2026 and up to $350,000,000,000 over the next decade." Bishop and others warned that reduced audit and collections capacity could lower voluntary compliance.
Bissett said Treasury's priorities remain "collections, privacy, and customer service" and argued better IT and automation could sustain collections with a smaller workforce: "I believe through smarter IT, through this AI boom, that we can use that, to enhance collections." He also said some earlier IT spending was wasteful and that rightsizing would restore the agency to pre‑IRA staffing levels.
Ranking Member Hoyer and Representative DeLauro questioned the premise that personnel cuts do not reduce revenue, citing inspector general reports and prior appropriations that increased enforcement and produced additional revenue. DeLauro told the secretary that targeted enforcement investments recovered more than $1.1 billion from high‑income taxpayers and cited projections that additional investment in high‑end enforcement could produce further revenue over a decade.
The committee asked Treasury to provide analyses showing the expected revenue impacts of proposed staffing and IT changes, timeline estimates for IT modernization, and how automation will substitute for experienced enforcement staff. Members requested those materials for the record.
