In addition, the legislation would put additional restrictions on spending and prohibit employees from implementing the individual mandate or tax penalty for failing to get insurance in the Affordable Care Act, The Hill reported.
Politico said House Majority Leader Eric Cantor, R-Va., plans floor votes before the August recess on a number of bills in response to IRS scandals.
The report said one bill would allow U.S. citizens to record conversations between themselves and federal enforcement officials.
The fiscal 2014 spending bill released by House Appropriations Committee Chairman Hal Rogers, R-Ky., would allocate only $9 billion for the IRS. The Hill said that is $4 billion short of President Obama's budget request. The Internal Revenue Service was allocated $12 billion in fiscal 2013.
The legislation would also withhold 10 percent of the IRS's enforcement budget until it fully implements the recommendations of the watchdog group that investigated agency improprieties, including the improper targeting of political groups and excessive spending on IRS conferences.