What’s the IRS Going to Do with Their $80 Million?
The Biden administration has created a financial windfall for the Internal Revenue Service through the Inflation Reduction Act. The IRS released a report last week giving some insight into what they plan to do with their surplus of $80 million.
Officials have indicated that much of the money will be devoted toward audits, so the middle-class wage earner is growing concerned.
Treasury Secretary Janet Yellen said that the money will also enable the IRS to upgrade information technology systems so that it will be easier for individuals and small businesses to file their taxes.
The truth probably has come from the Treasury Inspector General for Tax Administration who has indicated that the agency has not yet decided how the funds will impact audit rates for middle-income taxpayers.
The report released indicated that the Inflation Reduction Act earmarked $45.6 billion toward enforcement activities. This will allow agents to “determine and collect taxes owed.”
Only $3.2 billion will be used to help taxpayers with “filing and account services, pre-filing assistance, and education.”
And $4.8 billion will be used for business systems modernization.
So the bottom line is that the agency’s budget for enforcement activity will increase by 69% over the next decade. And the budget for taxpayer services will only increase by 9%.
Yellen keeps promising that the new resources will not be used to increase audit rates for American households earning less than $400,000 per year “relative to historical levels.”
But she has not clarified that the “historical levels” of enforcement were far higher as recently as one decade ago.
And a document from the Treasury Inspector General for Tax Administration revealed that IRS officials “have not yet finalized what constituted the $400,000 income level or what historic audit level will be used for its metrics.”
So the American people are dealing with 40-year high inflation, and now the IRS is released to audit us at greater levels.