So, they spent $10 billion to go after and get $1 billion, and at the same time spent an additional trillion more every 100 days. What a bargain. What a joke on America.
The Internal Revenue Service (IRS) announced a significant success in its initiative to target wealthy tax evaders, having recovered over $1 billion since intensifying efforts to collect from high-income earners. This announcement, made jointly with the U.S. Treasury Department, highlights the impact of the $80 billion funding boost provided by the 2022 Inflation Reduction Act.
The IRS’s recent achievements aim to dispel misconceptions perpetuated by some Republican lawmakers, who falsely claimed that the funding would be used to hire 87,000 new agents to audit average Americans. Contrary to these claims, the IRS has clarified that the funds are being utilized to hire customer service representatives, enhance technology, and address the backlog caused by pandemic-related office closures and processing delays.
IRS cracks down on high-wealth cheats https://t.co/LhqNVcIu1u
— WKBN 27 First News (@WKBN) July 11, 2024
A key focus of the IRS’s enhanced efforts is auditing individuals with annual incomes exceeding $1 million and tax debts over $250,000. Federal officials have emphasized that the primary targets are wealthy individuals and large corporations, with no plans to increase audit rates for those earning less than $400,000 a year.
U.S. Secretary of the Treasury Janet Yellen underscored the fairness and effectiveness of the initiative. “President Biden’s Inflation Reduction Act is increasing tax fairness and ensuring that all wealthy taxpayers pay the taxes they owe, just like working families do,” she stated. Yellen also highlighted that the new initiative has already yielded significant results, recouping over $1 billion in overdue taxes from a small group of wealthy taxpayers.
In May, IRS Commissioner Danny Werfel detailed the agency’s strategy to enhance enforcement. This includes tripling audit rates for corporations with assets exceeding $250 million and increasing audits by 50% for individuals with incomes over $10 million. The aim is to demonstrate a commitment to fairness and accountability in the tax system.
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Eugene Steuerle, a fellow and co-founder of the Urban-Brookings Tax Policy Center, acknowledged that increased government investigations might initially seem intrusive. However, he suggested that if the IRS can effectively communicate the transparency and necessity of its investigations, public fear of audits may diminish, potentially garnering broader support for the agency’s efforts.
Despite these successes, the IRS faces ongoing challenges from Republican lawmakers who have pushed for cuts to the agency’s budget. In the summer of 2023, House Republicans succeeded in implementing a $1.4 billion reduction to the IRS’s funding as part of the debt ceiling and budget cuts package. Additionally, a separate agreement was made to redirect $20 billion from the IRS over the next two years to other non-defense programs.
Further budgetary threats loom as the House Republicans’ fiscal year 2025 proposal includes additional cuts to the IRS, specifically targeting the Direct File program, which aims to simplify tax filing for Americans by allowing them to file directly with the IRS.
Key Points:
i. The IRS has recovered over $1 billion from wealthy tax evaders since increasing enforcement efforts.
ii. Funding from the 2022 Inflation Reduction Act is being used to improve customer service and technology, not to audit average Americans.
iii. The IRS focuses on auditing high-income individuals and large corporations, avoiding increased audits for those earning under $400,000.
iv. Despite successes, the IRS faces budget cuts from Republican lawmakers, threatening its enforcement capabilities.
v. Effective communication and transparency in IRS investigations are essential to gaining public support for these initiatives.
Al Santana – Reprinted with permission of Whatfinger News
