The Internal Revenue Service (IRS) is reportedly ramping up audits on everyone, thanks to the Biden administration’s “Inflation Reduction Act.”
According to an April 6 report by the U.S. Department of the Treasury and the IRS, the agency would begin using some of the legislation’s $80 million funding to boost audits. The target demographics are those who make more than $400,000 a year and business owners who file intricate taxes.
The IRS has put out a plan to use new funding from the Inflation Reduction Act to crack down on wealthy tax cheats and make it a lot easier for hardworking Americans to file their taxes and claim refunds. This is great and long overdue.https://t.co/6MrCId7voq
— Elizabeth Warren (@SenWarren) April 9, 2023
President Joe Biden said in his State of the Union Address last February that the “tax system is not fair” and that he doesn’t think billionaires should pay lower tax rates than teachers.
“And I think a lot of you at home agree with me that our present tax system is simply unfair,” Biden said. “The idea that in 2020, 55 of the biggest companies in America made $40 billion in profits and paid zero in federal income taxes? That’s simply not fair.”
“Under my plan, nobody earning less than $400,000 a year will pay an additional penny in taxes,” he continued. “Because no billionaire should pay a lower tax rate than a school teacher or a firefighter.”
The Washington Post has since reported that Wally Adeyemo, the deputy secretary of the Treasury, wants the IRS to audit Americans with high incomes at a pace similar to that of 2011.
“The IRS has put out a plan to use new funding from the Inflation Reduction Act to crack down on wealthy tax cheats and make it a lot easier for hardworking Americans to file their taxes and claim refunds. This is great and long overdue,” Democratic politician Elizabeth Warren tweeted.
Since Biden signed the measure last August, some Republican lawmakers have claimed that the IRS would use the money to hire an army of 87,000 tax agents with weapons.
“The last thing the American people need right now are more audits from an out-of-control, bloated IRS,” said Nebraska Rep. Adrian Smith at the time. “The Inflation Act funding for IRS would lead to the hiring of 87,000 new IRS employees tasked with raising enough revenue to pay for Democrats’ Green New Deal priorities.”
Despite the agency’s promise to tax the wealthy, there is still a discrepancy between taxing the rich and low-income individuals.
“Barring an unlikely significant change in the composition of IRS enforcement, the stepped-up enforcement would subject taxpayers across the income spectrum to more scrutiny and greater audit risk,” the Heritage Foundation said in a recent blog post.
