The $1.1 trillion 2014 budget agreement reached by House and Senate negotiators earlier this week would cut the budget of the Internal Revenue Service to $11.3 billion, in part as a result of the controversy over the agency's alleged scrutiny of conservative groups, Forbes reports.

According to a summary released by the House Appropriations Committee's Financial Services Subcommittee, the IRS budget for fiscal year 2014 will be $526 million less than its 2013 budget — and $1.7 billion less than the White House requested. The agreement also explicitly restricts, and requires extensive reporting to Congress on, a range of IRS activities. "To help curb potential illegal and unethical activities at the IRS, the bill prohibits funds to target groups for regulatory scrutiny based on their ideological beliefs or to target citizens for exercising their First Amendment rights," the summary states. "The legislation also requires extensive reporting on IRS spending, training, and bonuses, and prohibits funding for inappropriate [training] videos."

According to Forbes, such restrictions represent political payback for the flagging of Tea Party-affiliated groups by some IRS employees as they were examining the applications of those groups for tax-exempt status as 501(c)(4)s. However, cutting the IRS budget will only exacerbate the lack of resources at the short-staffed agency, Forbes notes, in addition to potentially hamstringing the agency's efforts to clarify rules for so-called social welfare organizations — thus enabling 501(c)(4) groups to continue avoiding public disclosure of their funders.