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.
“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.