New legislation could throw a wrench in IRS plans to launch a free government-run tax filing program after millions of dollars in lobbying by for-profit tax prep service providers.

On Monday, newly-minted House Speaker Mike Johnson (R-La.) introduced a bill making $14.3 million in aid to Israel contingent on reducing funding for the IRS. The Inflation Reduction Act of 2022, which President Joe Biden signed into law last year, set $15 million aside for the IRS to develop the free service. Leading for-profit tax prep companies oppose the program.

While Johnson framed the proposed cut as an attempt to offset the cost of the military aid package and reduce the national debt, a new report from the Congressional Budget Office found that defunding the IRS would actually increase the federal deficit by $12.6 billion over the next decade.

The House is expected to vote on the legislation this week.

But Senate Democrats, who hold a narrow majority in the chamber, have called the bill a “non-starter.” The White House has also promised to veto the […]

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