Cutting the IRS loses money. The CBO says so.
Enforcement funding returns more than it costs, so rescinding it doesn’t save money — it widens the deficit. Congress’s own nonpartisan scorekeeper says so, and Congress cut it anyway.
This is the austerity myth caught in the act: a “spending cut” that the official scorekeeper says adds to the deficit. This page grades the CBO finding and the numbers behind it.
What this page is about
The Congressional Budget Office — Congress’s own nonpartisan scorekeeper — finds that money spent on IRS enforcement returns more than it costs. So cutting that funding reduces revenue by more than it saves, and increases the deficit. Rescinding roughly $20 billion of IRS funding loses about $66 billion in revenue; a $35 billion cut loses about $89 billion.
That is the austerity myth at its clearest: a “spending cut” that the official arbiter says makes the deficit bigger, sold as fiscal responsibility. Congress clawed back much of the 2022 IRS funding regardless.
The same investigation, restaged one beat at a time. Step through it here, or present it fullscreen.
Cutting the IRS loses money.
Enforcement funding returns more than it costs, so rescinding it doesn't save money — it widens the deficit. The nonpartisan CBO scores it that way, and Congress cut it anyway.
The “cut” that costs money
Because the IRS curtails its lowest-return enforcement first, the revenue lost per dollar rescinded grows as the cut gets bigger. Every figure below is a nonpartisan CBO score or a direct reading of one.
| IRS funding rescinded | Revenue lost (CBO-based) |
|---|---|
| ~$20 billion | ~$66 billion (CRFB, reading updated CBO) — above 3-to-1 |
| ~$35 billion (over 10 years) | ~$89 billion (Bipartisan Policy Center, citing CBO) |
The direction is the point: in every case the revenue lost exceeds the money “saved,” so the net effect of the cut is a larger deficit, not a smaller one.
Sources: CBO, “How Changes in Funding for the IRS Affect Revenues” (pub. 60037; Feb. 2024 rescissions report); Committee for a Responsible Federal Budget; Bipartisan Policy Center.
The record, claim by claim
Cutting IRS funding increases the deficit — the CBO scores it that way.
FACTThe Congressional Budget Office, the nonpartisan body Congress relies on to score legislation, finds that rescinding mandatory IRS funding reduces federal revenue by more than the amount of the cut, so the net effect is to increase the deficit. The reason is straightforward: enforcement spending has a positive return, so removing it forgoes more in uncollected taxes than it saves in appropriations. This is not an advocacy estimate; it is the official scorekeeper's own analysis.
The bigger the cut, the worse the deal — because the IRS drops its lowest-return work first.
FACTCBO explains that when the IRS loses resources it first curtails the enforcement activities with the lowest estimated return, so the revenue lost per dollar rescinded is larger for a bigger rescission than a smaller one. That means the more Congress cuts, the more each cut dollar costs in forgone revenue — the opposite of the intuition that cutting more saves more.
In dollars: a ~$20B cut loses ~$66B; a ~$35B cut loses ~$89B.
FACTThe Committee for a Responsible Federal Budget, reading updated CBO scoring, estimated that rescinding about $20 billion of IRS funding would lose roughly $66 billion in revenue — a return above three to one, and higher than CBO's earlier estimate. The Bipartisan Policy Center, citing CBO, put the revenue loss from a $35 billion rescission over ten years at about $89 billion. Different cut sizes, same result: the government loses far more than it keeps.
Where the evidence is strong, and where we hold the line
- The direction is settled by the official scorekeeper. This is not a think-tank claim the other side can wave off. CBO, which both parties rely on, scores IRS cuts as revenue-losing and deficit-increasing.
- We cite the scored figures, not a slogan. “$20B out, $66B lost” and “$35B out, $89B lost” are specific CBO-based numbers. We avoid a single “X-to-1” headline because the ratio moves with the size of the cut.
- CBO is the conservative floor. Treasury and IRS marginal estimates run higher, roughly five-to-one to nine-to-one for high-end enforcement, because they credit deterrence and improved voluntary compliance that CBO scores cautiously. We lead with the lower, harder number.
A “cut” that bills the honest taxpayer
When enforcement funding is cut, the taxes still owed by high-income filers and large corporations do not disappear; they simply go uncollected, and the shortfall lands on everyone who already pays. Selling that as fiscal responsibility, while the official scorekeeper says it deepens the deficit, is the austerity myth working exactly as designed: the “we can’t afford it” logic applied to the one kind of spending that pays for itself. It is the mirror image of the self-dealing the Austerity Myth hub tracks: cut the auditors, and the people with the most to hide pay the least.
Questions worth taking seriously
Isn't more IRS funding just more audits of ordinary people?
The high returns come from complex, high-income and corporate enforcement, which is expensive to staff and where the unpaid amounts are largest. That is exactly the enforcement the IRS drops first when cut, which is why the lost revenue per dollar rises as funding falls.
Is this just a Democratic talking point?
No. The source is the Congressional Budget Office, the nonpartisan agency both parties use to score bills. The finding that IRS cuts lose net revenue is CBO’s, not an advocacy group’s.
So what's the exact return on a dollar?
There isn’t one fixed number. CBO’s scored figures imply a direct return of roughly two- to three-plus-to-one that rises with the size of the cut; Treasury and IRS marginal estimates run higher (about 5-to-1 to 9-to-1) once deterrence is counted. We cite the range and the specific dollar losses rather than a single multiple.
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This site aggregates and grades a record that other outlets and primary sources have already put on the record. Every FACT-graded claim above is sourced to court filings, government reports, sworn whistleblower disclosures, published investigative journalism, or named-source statements. The citations are the accountability mechanism; this section is how you get on the record too.
The record
- Congressional Budget Office — How Changes in Funding for the IRS Affect Revenues (pub. 60037)
- CBO — IRS rescissions analysis (Feb. 2024, PDF): revenue loss per dollar rises with the size of the cut
- Committee for a Responsible Federal Budget — IRS Cuts Would Cause $66 Billion of Revenue Loss
- Bipartisan Policy Center — The State of IRS Funding in 2026 (citing CBO: $35B rescission → ~$89B revenue loss)