Most of the money will go towards audits of the middle class and less to improved service.
Progressives want Joe Biden to unleash what they call “beast mode” executive power, and the Schumer-Manchin tax bill supplies the cash to turn the Internal Revenue Service into Wolverine.
The pact between Sen. Joe Manchin and Majority Leader Chuck Schumer includes $80 billion in new funding for the tax man. Democrats claim this “investment” will yield more than $200 billion in revenue. That estimate is highly speculative, but if it’s anywhere close to right IRS auditors will soon be coming after tens of millions of Americans.
The $80 billion is more than six times the current annual IRS budget of $12.6 billion. The money will be ladled out over nine years and comes with few strings attached. The main Democratic command is for the tax agency to bring the hammer down on taxpayers.
The bill earmarks $45.6 billion for “enforcement,” including “litigation,” “criminal investigations,” “investigative technology,” “digital asset monitoring” and a new fleet of tax-collector cars. The result will be far more audits, civil suits and criminal referrals.
The main targets will by necessity be the middle- and upper-middle class because that’s where the money is. The Joint Committee on Taxation, Congress’s official tax scorekeeper, says that from 78% to 90% of the money raised from under-reported income would likely come from those making less than $200,000 a year. Only 4% to 9% would come from those making more than $500,000.
The IRS knows the super-wealthy employ lawyers and accountants who make litigation time-consuming and risky. It also knows that Democrats would howl if the agency pursues fraud in the earned-income tax credit program, despite what the IRS has estimated are $18 billion in improper payments each year.
A particular audit target will be “pass throughs” including Subchapter S businesses that file under the individual tax code. Democrats failed to raise the top individual tax rate, so unleashing IRS auditors is Plan B.
Many of these are small businesses that will settle with the IRS rather than fight and endure years of costly litigation. The IRS won only $1.7 billion of the $4 billion in disputed taxes and penalties in cases closed in U.S. tax court in fiscal 2019. But few taxpayers can afford to fight in court.
Despite all this new money, Americans shouldn’t expect better IRS service. The agency in the 2022 filing season answered a mere 10% of its phone calls. The Taxpayer Advocate Service revealed in June that as of May 31 the IRS was still sitting on 21.3 million unprocessed paper tax returns, with millions of taxpayers “waiting six months or more to receive their refunds.” Yet the Schumer-Manchin bill devotes only $3.2 billion for “taxpayer services.”
The bill does, however, provide $15 million to study a bad Elizabeth Warren idea. An IRS task force will have nine months to deliver a report on the feasibility of the IRS running its own “free direct efile tax return system.” America has a voluntary tax system that lets taxpayers determine their correct amount of tax before the IRS checks it.
Sen. Warren wants to create what would be a federal H&R Block that assesses tax liability for taxpayers. Taxpayers would presumably have to appeal if they disagree, and who knows how long that would take.
All of this is likely to be made worse by what seems to be the increasing politicization of the tax agency. Lois Lerner notoriously targeted conservative nonprofits for special scrutiny in 2013. ProPublica, the left-leaning website, obtained and published the confidential tax information of private citizens in 2021—conveniently when Democrats were debating whether to impose a new wealth tax. The IRS has promised to investigate the illegal leak but has so far come up empty.
The new wave of audits will hit taxpayers even as tax revenue as a share of GDP is back close to its historic norm of 18.5% and may be going higher as corporate and individual tax revenue soars. Tax receipts were up 25% in the first nine months of fiscal 2022 after rising 18.3% in fiscal 2021.
The federal government isn’t starving for revenue. Congress wants more tax revenue because it can’t control its appetite for spending. That’s why it wants a tax agency in beast mode.
I thought they added thousands of auditors during the Obama regime to target taxpayers? I know we haven't been audited nor do I know anyone who has been. The WSJ likes to print stuff like this. Last I heard the IRS is way understaffed according to our accountant.
"Fixed fortifications are monuments to mans stupidity" - George S. Patton
The IRS should be dismantled and a 5% flat tax on every American should be implemented. But to make that work would mean that the .gov would have to stay within its budget…and it’s constitutional role…and that’s ain’t gonna happen.
"Violence, naked force, has settled more issues in history than has any other factor.” Robert A. Heinlein
“You may beat me, but you will never win.” sigmonkey-2020
“A single round of buckshot to the torso almost always results in an immediate change of behavior.” Chris Baker
|I'd rather have luck |
than skill any day
Why does this have the look and feel of us against them?
I think you have accurately assessed the real intent here.
|Back, and |
to the left
It may be more chicken little reporting, but a six fold increase in IRS budget is not good news for anybody. Especially in this economic climate.
With multiple federal agencies being set upon the bulk of American taxpayers (IRS, ATF, even Census) the stage is being set to give the MSM the dramatic optics they can use to peddle the white supremist BS.
"The $80 billion is more than six times the current annual IRS budget of $12.6 billion. The money will be ladled out over nine years and comes with few strings attached."
This is a bit dramatic. It's spent over nine years, why are they comparing it to the annual budget?
Ok, so let's take it by year then.
$80B over 9 years is ~$9B/year. Which is a 74% increase in the IRS budget annually.
It ain't peanuts and the purpose is to squeeze the middle class.
Hedley Lamarr: Wait, wait, wait. I'm unarmed.
Bart: Alright, we'll settle this like men, with our fists.
Hedley Lamarr: Sorry, I just remembered . . . I am armed.
This must be the way the Washington demonrats think will raise money to help offset the larger deficit that they are creating by passing trillions of US money bill after bill; by auditing the middle class and trying to find money there. God Bless
"Always legally conceal carry. At the right place and time, one person can make a positive difference."
|thin skin can't win|
WTF is this? Can't have their employees using own cars and getting the entirely reasonable and well thought out IRS maximum allowable mileage reimbursement for that use?
Or does a tax-collector car include a special safe in the back where they store all their booty. In the bootie!
You only have integrity once. - imprezaguy02
The writer would be more effective by being less dramatic.
|Down the Rabbit Hole|
How else to you think they can fund their plans to redistribute wealth? They sure as hell aren't going to take money from the rich.
Diligentia, Vis, Celeritas
"People sleep peaceably in their beds at night only because rough men stand ready to do violence on their behalf."
-- George Orwell
|This Space for Rent|
So, will they go after Al Sharpton and all the other tax dodging Democrats as well? I’m not so certain they will
We will never know world peace, until three people can simultaneously look each other straight in the eye
Liberals are like pussycats and Twitter is Trump's laser pointer to keep them busy while he takes care of business - Rey HRH.
|I Deal In Lead|
Hi, I'm Flash and I've been audited (once). Now you can say you sort of know someone who's been audited.
They said I owed around $16K because of unreported Capital Gains. I represented myself and did an Amended Return showing a much larger amount of Capital losses.
I ended up not owing anything and I got a credit of around $3,500.00/year for 5 years on my taxes.
|Fire begets Fire|
"Pacifism is a shifty doctrine under which a man accepts the benefits of the social group without being willing to pay - and claims a halo for his dishonesty." ~Robert A. Heinlein
Years ago I might have said, well, if you pay your share and don't cheat, you ain't got nuthin' to worry about.
That would have been years ago. I've been audited three times-yep, THREE times.
And my taxes have always been done by a CPA!
The first two occurred when I was a young policeman. I get that, police officers, back in my day at least, worked off-duty police jobs that paid cash (sometimes checks) and many (most?) did not declare that income on their taxes. EZ pickings for the IRS, using bank deposits and, sometimes police records of these off duty jobs and who worked them.
But I did, I claimed all my earnings. And both of those two audits ended up with no tax due and I felt good-I'd been exonerated.
Then after law school and working for many more years, I retired and relaxed to enjoy my "Golden Years." I gave money to my Church and they gave me a receipt at the end of the year which I gave my CPA as another deduction.
Then one day, out of the blue, came a third IRS audit targeting the money I had claimed I gave to the Church. I called the IRS agent, but never could talk to her, and then, Holy Cow, I got an IRS bill for 10,000 dollars and a letter attached asking how I wanted to pay it, all at once, or over time.
I called the IRTS again, but the Agent I was trying to deal with was off and I got another lady who listened, kinda growled and said something like, "Her, again!" She put me on hold and went back to the off-duty Agent's office, found my "stuff" and returned to the line. Turns out that for this year, the Church had neglected to put the TIN/EIN on the receipt (new secretary).
All I had to do was have the Church re-do the receipts with the TIN/EIN and, sure enough, got another letter from the same lady I'd talked with saying no additional taxes were due.
My point is, the original agent knew the Church was legit and could have taken my calls, told me the problem and I'd have gotten another receipt.
Don't know if it is true or not, but my CPA said the IRS paid their agents a bounty, a percentage of collected taxes by their Agents and he believed that was this Agent's game, to scare me into paying money I really didn't owe.
Good luck to 'em in finding new cars....
God bless America.
|Just because you can, |
doesn't mean you should
I'm going to make a guess that they will be electric cars and they will burn up a significant part of this budget.
Avoid buying ChiCom/CCP products whenever possible.
|Little ray |
I know several CPAs primarily in tax practice. The IRS is understaffed and this is an attempt to correct that.
I am conflicted. The tax code sucks. But I don't cheat on my taxes and why should anyone else get away with it?
I'd love to have a rational tax code, but I don't like cheaters, either.
The fish is mute, expressionless. The fish doesn't think because the fish knows everything.
If the .gov says it will increase revenue you can be sure it will do the opposite.
I think they should start their targeted enforcements on bartenders/waitress in AOC district. Maybe they could in good faith check her previous returns to make sure there was no under reporting.
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