GOP Sen. Marsha Blackburn’s bill would cut IRS user fees for small businesses


If the IRS is getting tens of billions of dollars in additional funding, one senator wants to make sure it finds a way to ease life for taxpayers — and particularly small businesses — by cutting the agency’s user fees.

Sen. Marsha Blackburn, Tennessee Republican, said the IRS has been nickel-and-diming taxpayers with disproportionate fee increases the agency is allowed to charge for services that often help them to figure out tax obligations in advance. 

She said rising fees have priced businesses out of the ability to work with the IRS, leaving them at risk of non-compliance. 

Her legislation would require the IRS to cut fees for taxpayers with incomes of less than $5 million.

“White House and Congressional Democrats want to weaponize the IRS by giving them billions of dollars, authorizing thousands of new agents, and allowing them to raise user fees for small businesses,” she said. “This legislation prevents this massive overreach by ensuring that American businesses are not buried under exorbitant user fees – especially when they are already struggling to stay afloat in Joe Biden’s failing economy.”

The IRS has admitted it raised user fees over the previous decade as a way of raising money it said it needed, but which Congress declined to provide.

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The National Taxpayer Advocate has warned that the agency risks eroding its mission if it makes services fee-dependent.

Fees total hundreds of millions of dollars in revenue a year for the agency.

Ms. Blackburn’s bill is one of a series of proposals from Republicans in the wake of a new law Mr. Biden signed this summer pumping $80 billion into the tax agency.

Democrats, who powered the legislation through Congress, say the money should be used to provide better service to taxpayers, but also to increase audits for taxpayers with incomes more than $400,000. Democrats argue that too many wealthy Americans are avoiding paying what they should.

GOP lawmakers say it’s impossible to restrict the reach of the IRS, and predict rank-and-file taxpayers will feel the heat of increased audits.

They point to IRS data that suggests the new money could pay for 87,000 more employees at the tax agency.

House GOP leaders promised this week to pursue legislation that would cancel the hiring of new IRS personnel if Republicans win control of the chamber in November’s elections.


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