The Trump administration on February 12 released its much-anticipated fiscal year (FY) 2019 budget request, “Efficient, Effective, Accountable An American Budget.” The administration’s proposal calls for IRS funding that focuses additional resources on enforcement and cybersecurity. Coming off passage of the Tax Cuts and Jobs Act, this year’s budget recommendations contain only a handful of additional tax proposals when compared to some prior-year budget requests.

Take away. Presidential budget requests are not binding; rather, the requests offer a legislative proposal for congressional lawmakers to consider. A Treasury Department “Green Book” that traditional outlines an administration’s revenue proposals for the coming year is not expected this year in light of the Tax Cuts and Jobs Act’s recent passage. Some practitioners have expressed concern that not enough resources in the proposed budget would be allocated toward providing guidance to fully implement the new law.

IRS

The administration’s budget proposal breaks its IRS funding request into four parts. The administration proposes allocating $11.1 billion in base funding, $2.3 billion for key tax filing and compliance initiatives, and $110 million for IT modernization efforts. Additionally, funding is requested to expand and strengthen tax enforcement.

Comment

“These additional investments over the next 10 years are estimated to generate approximately $44 billion in additional revenue at a cost of $15 billion, yielding a net savings of $29 billion over 10 years,” the proposal states.

Tax provisions

In addition to IRS funding, the administration’s 2019 budget requests certain tax changes. These changes, among others, would include provisions to provide more oversight of paid tax preparers, require valid Social Security numbers when claiming the earned income and child tax credits, allow the IRS more flexibility in correcting errors on tax returns that seek refunds, allow Medicare recipients with high-deductible plans to make tax-deductible contributions to health savings accounts, and, as part of the administration’s infrastructure plan, expand by $6 billion the use of tax-exempt private activity bonds.