Official audits show a record of incompetence. Democrats are still giving the tax agency an $80 billion raise.

The new Inflation Reduction Act has many damaging provisions, but for sheer government gall the $80 billion reward to the Internal Revenue Service stands out. The money will go to hire 87,000 new employees, doubling its current payroll. This is also doubling down on incompetence, as anyone can see in the official reports of the Treasury Inspector General for Tax Administration (Tigta).
We’ve read those reports for the last several years so you don’t have to, and the experience is a

a government version of finding yourself in a blighted neighborhood for the first time. You can’t believe it’s that bad. The trouble goes beyond the oft-cited failures like answering only 10% of taxpayer calls, or a backlog of 17 million unprocessed tax returns. The audits reveal an agency that can’t do its basic job well but will terrorize taxpayers whether deserving or not.

***
Consider the agency’s chronic mishandling of tax credits. By the IRS’s own admission, some $19 billion—or 28%—of earned-income tax credit payments in fiscal 2021 were “improper.” The amount hasn’t improved despite years of IRS promises to do better.

• A January Tigta audit found that an estimated 67,000 claims—totaling $15.6 billion—for the low-income housing tax credit from 2015 to 2019 “lacked or did not match supporting documentation due to potential reporting errors or noncompliance.”



• A May audit found that 26% ($1.9 billion) of its American opportunity tax credits for education expenses were improper in fiscal 2021, and 27% ($541 million) of its net premium tax credits (ObamaCare) were improper in fiscal 2019 (the most recent year it estimated). The same May audit said the IRS acknowledged that 13% ($5.2 billion) of its enhanced child tax credit payments were improper.

• How did it handle $1,200 stimulus checks, the sick and paid family leave credit, or the employee retention tax credit? Unknown, since the agency didn’t estimate failure rates—for which Tigta rapped its knuckles.

• A September 2021 audit found the IRS in 2020 issued 89,338 notices to taxpayers insisting that “balances were owed even though the taxes were not actually due.” Why? Because the feds had extended the filing deadline amid Covid but the IRS apparently didn’t notice.

• A February audit found the IRS department responsible for ensuring retirement-plan tax compliance suffered a 23% decline in the quality of its examinations from fiscal 2018 to fiscal 2020. In the past seven months, Tigta has issued searing reports on IRS mismanagement of everything from its partial-payment program for delinquent taxpayers, to its auditing of partnerships, to its struggle to handle internal employee misconduct.

• This ineptitude extends to programs Democrats insist will now raise revenue—those targeting higher earners. In 2010 Congress passed the Foreign Account Tax Compliance Act, which was supposed to identify wealthy Americans using undisclosed foreign accounts. Congress’s Joint Committee on Taxation said this would raise some $9 billion in revenue by fiscal 2020. Yet an April Tigta audit noted that while the IRS has spent $574 million to implement the law, the agency has drummed up only $14 million in compliance revenue.

• A July 2021 audit related the failure of the IRS small-business/self-employed division’s strategy, which began in 2010 to examine more returns from “high-income individual taxpayers.” The IRS defines high earners as those with income greater than $200,000. Yet from fiscal 2015 to the end of fiscal 2017 (when the strategy was shut down), 73% of returns targeted by the strategy fell below $200,000.

Democrats say a turbocharged IRS won’t pursue taxpayers earning less than $400,000, but don’t believe it. Middle-income Americans are easier marks, as they are more likely to write a check than engage in years of costly litigation.

***
The Tigta site shows the IRS is good at one thing: punishing those who resist its demands. A March audit chastised the IRS for using lien foreclosure suits to confiscate “principal residences” from delinquent taxpayers, a process that does “not provide [taxpayers] the same legal protections as seizures.”

A March 2017 report related the agency’s crackdown on businesses flagged as potentially evading a law that requires financial institutions to report currency transactions exceeding $10,000. The IRS took to seizing property from its targets before even conducting interviews. Tigta reports that even when interviews were conducted, the IRS failed to advise the accused of their rights or the purpose of the interview, and failed to consider “realistic defenses or explanations.” Tigta found that “most” of those targeted (owners of gas stations, jewelry stores, scrap-metal dealers, restaurants) had not committed crimes, though many were never able to regain their property.

This is the IRS that Democrats are now arming with more money and manpower to unleash on Americans. The $80 billion is a demonstration of their priorities, and further proof of the rule that failure in government is invariably rewarded with a bigger budget.

LINK: https://www.wsj.com/articles/t...17?mod=hp_opin_pos_1

The IRS looks like the new FBI, but with more power and less accountability.

Saw some knucklehead Congressman from New York on Fox this morning. When asked about the 80,0000+ new agents he claimed people earning less than $400,000 don't pay taxes so they won't run the risk of audit. He repeated it a couple of times.
Not sure if he is just brain dead or off the charts dishonest.
If the 80,000 get hired it's going to be small businesses and entrepreneurs earning $100,000 and up that are going to get audited. They are the low hanging fruit. Most won't have the money or expertise to fight the IRS.

Thank goodness. Another IRS thread.

quote:

Originally posted by jljones:
Thank goodness. Another IRS thread.

Joined the club of the targeted and harassed and see how it feels.

Every year I owned a small business in Oregon, I was audited (during the tea party years), and the next year after I left. It's expensive, its harassment, and the only way out is to pay a lawyer to get them to stop.

I'd like to add that not a single time did I make an error or end up having to pay penalties or errors. It just cost me lawyer time. The IRS is a weaponized plague that targets those who don't have the money to take the fight to them. NOW it is going to get worse.

quote:

Originally posted by AKSuperDually:
I'd like to add that not a single time did I make an error or end up having to pay penalties or errors. It just cost me lawyer time. The IRS is a weaponized plague that targets those who don't have the money to take the fight to them. NOW it is going to get worse.

I got audited once when I owned my small business over the 20+ years I owned it.

The IRS ended up paying me over $3K/year for 5 years as a credit on my income tax.

They never bothered me again. My Dad's CPA told me years ago, before I started my business, to put in something where if I got audited I'd get money back and it would stop them and he was right.

The only thing was, I didn't put anything in, I just made an error, actually 2, one negative and one positive and the positive far outweighed the negative.

And I went to the audit alone, no lawyer, no CPA, nothing. If you've got your shit together, and your records are in order, you can do it alone. My ex brother in law did a similar thing with his one audit.

My IRS would be staffed with 500,000 auditing agents whose only job would be to audit every government expenditure, local, State and federal, with an enforcement arm to frog march any bureaucrat, politician, official or proxy that wastes, commits fraud or abuses tax payer money or creates policy that does so.

quote:

Originally posted by darthfuster:
My IRS would be staffed with 500,000 auditing agents whose only job would be to audit every government expenditure, local, State and federal, with an enforcement arm to frog march any bureaucrat, politician, official or proxy that wastes, commits fraud or abuses tax payer money or creates policy that does so.

But the government is so screwed up they'd never find all the ways their employees waste money.

Here's another one that concerned me. I was doing a lot of contract jobs for Homeland Security. I billed them the contract amount plus my actual expenses for hotels only, nothing for meals or anything like that.

Well, after around 20 years they decided I was doing it wrong and they wanted receipts for the hotel for the last job I did for them. It was a pain in the ass to find a receipt and get it to them, but I complied.

So the next time I bid a job I did it based on per diem and I took the figures from their own website. I ended up getting around 3 times the amount I had been charging them in the past.

They called me and were shocked that I did that because I never had in the past. I told them to back off on my giving them receipts and I'd go back to the old way. No dice they were building their paperwork empire and they couldn't go back, so they paid more every job...and they did the whole paperwork thing to "save money" for the Government.

The incompetence runs deep in Government jobs.

If there were real and painful consequences for waste like that, we’d see it toe itself off. A lot of squealing in between since bureaucrats and politicians have been unaccountable for so long and incompetence and apathy are genetic now.

quote:

Originally posted by AKSuperDually:
I'd like to add that not a single time did I make an error or end up having to pay penalties or errors. It just cost me lawyer time. The IRS is a weaponized plague that targets those who don't have the money to take the fight to them. NOW it is going to get worse.

Congress is filled with lawyers. So it’s no surprise everything they do creates new billing for lawyers. Puts money in their partners pockets. And who donates to congress critters? Lawyers. So it’s just one big kickback scheme.

They mean business and are being armed to the tooth. Come on out Grandma, the place is surrounded!

Hmmm...I thought that the House Republicans were going to stop the 87,000 new IRS agents.

quote:

I thought that the House Republicans were going to stop the 87,000 new IRS agents.

It's easy for the House Republicans to say so...
However, it's still in the so-called Inflation Reduction Act. It won't be easy to pass new legislation AND get it through the Dem Senate and past a Biden veto.
But it's a good campaign issue.

quote:

Originally posted by Powers77:
Saw some knucklehead Congressman from New York on Fox this morning. When asked about the 80,0000+ new agents he claimed people earning less than $400,000 don't pay taxes so they won't run the risk of audit. He repeated it a couple of times.
Not sure if he is just brain dead or off the charts dishonest.
If the 80,000 get hired it's going to be small businesses and entrepreneurs earning $100,000 and up that are going to get audited. They are the low hanging fruit. Most won't have the money or expertise to fight the IRS.

He's full of it. It will be another attack on the middle class. Rich people have good lawyers and will drag out any fight so long it won't be worth it.

quote:

Originally posted by chellim1:

quote:

I thought that the House Republicans were going to stop the 87,000 new IRS agents.

It's easy for the House Republicans to say so...
However, it's still in the so-called Inflation Reduction Act. It won't be easy to pass new legislation AND get it through the Dem Senate and past a Biden veto.
But it's a good campaign issue.

Did the legislation actually set aside the money for it or does the spending for it require future action by the House?

I’d like to share my 1040 with that congressman who said People making under 400k don’t pay taxes. In fact the last 30+ years worth of 1040. What a POS.

Still haven't cashed my check. Can't be too hard up for money.