Biden’s latest bill for healthcare and climate-related spending now includes a boost to the IRS. This will help them crack down on the billionaires who have successfully been evading taxes for decades on end.
However, the $80 billion boost to the agency might have significant ramifications for lower-income Americans, at least according to the Republican critics of the bill who, so far, have proved to be accurate.
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“Build Back Better” Act raised from the dead
Giving the IRS additional funding has been a top priority for President Biden. Now that his act has been supported by Senator Joe Manchin and Majority Leader Chuck Schumer, tax fraud may become a thing of the past.
Biden isn't trying to hire 87,000 new IRS agents to go after 800 or 900 billionaires.
Enjoy your audits.
— Carol Roth (@caroljsroth) July 29, 2022
Despite the Democrats’ projections that additional funding for the IRS could ultimately generate $124 billion in revenue over the next ten years, GOP lawmakers argue lower-income workers may also suffer the consequences of the bill.
Currently, up to $1 trillion in federal taxes remains unpaid every day, be it due to errors, fraudulent behavior, or simply a lack of resources to properly enforce tax collection.
Overturning the system may prove to be too large of a blow for most Americans to handle. That’s mainly because the IRS is already disproportionately targeting lower-income households when tax season comes around.
This is happening to the point that households with less than $25k yearly income are five times as likely to be audited than some billion-dollar corporation or individual.
Biden wants to hire 87,000 IRS agents.
There are less than 1,000 billionaires in America.
This is not about auditing billionaires.
— Lauren Boebert (@laurenboebert) July 29, 2022
Low-income Americans targeted by IRS
The main reason for this is tax returns are reviewed by phone or mail much more often than they are via face-to-face tax audits. Less than 20% of last year’s audits were conducted in person.
According to a thorough study of the subject matter, it was found that 54% of audits initiated by the IRS were targeting low-income workers who collected the income tax credit.
This was put in place specifically as an anti-poverty measure.
At the same time, nine million taxpayers in the US reported positive income ranging from $200k to $1 million; yet, only 40k of their returns were audited by the IRS.
This comes with a rough estimate of 4.5 audits per 1,000, a stark contrast to lower-income Americans who had to deal with 13 audits per 1,000 rate.
I was locked out of my account for 36 hours for saying that Biden is weaponizing the IRS just like Obama did.
Therefore, I would like to reiterate that Biden is weaponizing the IRS just like Obama did.
— John D (@RedWingGrips) July 31, 2022
Without any major changes to the fundamental principles of the IRS, any significant boost to the agency would do little to actually extinguish tax evasion among high-income individuals or corporations.
Lower-income households would be facing an even greater audit risk.
In response to these claims, the IRS stated they will not be increasing audit rates for households earning under $40k if the $80 billion in funding is approved; although no one is a stranger to false promises from both the IRS and the Biden administration.
This article appeared in The Record Daily and has been published here with permission.
