IRS Commissioner Warns Budget Cuts Would Add to Deficit

Daniel Werfel, the Internal Revenue Service commissioner, pushed back against claims from Republicans that he had not been following the law.

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Commissioner of the Internal Revenue Service Daniel Werfel, testified before the House Committee on Ways and Means at a hearing on Thursday at the Capitol.

The head of the Internal Revenue Service warned on Thursday that proposed cuts to his agency’s budget would ultimately cost the federal government more money and pushed back against accusations that he had been disregarding laws for political purposes.

The comments by the I.R.S. commissioner, Daniel Werfel, came in testimony before the House Ways and Means Committee as he approaches his first full year on the job. He has been overseeing a $60 billion overhaul of the tax collection agency. That funding, under the Inflation Reduction Act of 2022, had been scaled back from $80 billion, and Republican lawmakers are seeking further cuts.

“For every $100 million taken from the I.R.S., the deficit grows by $600 million over 10 years,” Mr. Werfel said, citing Treasury Department data.

Republicans extracted $20 billion from the I.R.S. last year when they struck a deal with Democrats to lift the debt limit. They have called for additional clawbacks during negotiations with the White House over how to pay for additional aid for Ukraine.

The threats of budget cuts have added uncertainty to the Biden administration’s plans to upgrade the technology the I.R.S. uses to process tax returns and beef up the agency’s ability to conduct audits, which Mr. Werfel has pledged will be focused on complex corporate partnerships and wealthy individuals.

Mr. Werfel said the agency had made substantial progress in the past year improving its responsiveness to taxpayers, clearing a backlog of unprocessed tax returns and taking steps to tighten security of taxpayer data after the financial information of wealthy taxpayers, including former President Donald J. Trump, were leaked in high profile security breaches.

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