I know the night is late, but when we come back, our very first bill will repeal the funding for 87,000 IRS agents. You see, we believe government should be to help you, not go after you.
Their first order of business is worse than a solution in search of a problem - it's a solution in service to a lie.
There are no plans to hire 87,000 IRS agents to "go after you" or to go after anyone else. There are plans to hire additional staff for the IRS, according to Time.
The Inflation Reduction Act... includes roughly $78 billion for the IRS to be phased in over 10 years. A Treasury Department report from May 2021 estimated that such an investment would enable the agency to hire roughly 87,000 employees by 2031. But most of those hires would not be Internal Revenue agents, and wouldn’t be new positions. (All emphasis throughout the post I've added.)
There are many good reasons for the funding, which will bring on IT staff and customer service folks - the government employees "who should help you," as McCarthy said. And yes, there will be auditors, who "would be largely tasked with cracking down on corporate and high-income tax evaders." According to folks at Treasury,
It is wholly inaccurate to describe any of these resources as being about increasing audit scrutiny of the middle class or small businesses.
So, what is accurate?
There's a big wave of attrition that's coming and a lot of these resources are just about filling those positions.
More than half of current IRS employees are retirement-eligible, and expected to leave in the next few years. The new funding might lead to a net employee gain of 20,000 - 30,000 people. That will bring staffing back to levels last seen over a decade ago.
The IRS currently has roughly 78,000 employees. According to John Koskinen, who served as IRS commissioner from 2013 to 2017, that’s down from around 100,000 when he first started. By the time he resigned four years later, he said, it was clear that the agency was in the grip of a systematic attempt by the GOP to weaken it.
When the GOP took control of the House after the 2010 election, Koskinen says, they "immediately instituted a series of crippling cuts..." Overall funding has "fallen further, by more than 20%" since then. And enforcement funding? That's dropped by 31%, making it easier now for "high-net-worth tax cheats and major corporations" to avoid paying their fair share, costing us billions.
Audit rates on the largest companies dropped from nearly 100% to 50%; audits on the wealthiest individuals dropped from 8.4% to 2.4% from 2010 to 2019, according to Janet Holtzblatt of the Urban-Brookings Tax Policy Center.
All of us agree a non-responsive government is a bad thing.
McCarthy's right - government should help us. But how can they do that on something as important as the income taxes we pay, if there's no one to answer the phone or process our tax returns? Or if the IT systems are so out-of-date, they can't find qualified folks to work on them, making it necessary to use manual processes instead?
It’s part of what the IRS calls the “Pipeline”: a 1970s-era assembly line used to process tax returns at several locations around the country. And it might give you a sense of why Congress is on the verge of handing the agency $80 billion through the Inflation Reduction Act — not only for more enforcement but also for tech modernization.
There's a massive backlog - over 10 million individual returns as of last July, partly from the pandemic, but also from
the agency’s embarrassingly outdated, paper-based system, which leaves stacks and stacks of returns cluttering shelves, hallways and even the cafeteria.
On the Pipeline, paper tax returns aren’t scanned into computers; instead, IRS employees manually keystroke the numbers from each document into the system, digit by digit.
All of this happens - the lack of audits on the people who have the most to lose if they get caught cheating, the lack of access to taxpayer assistance, the old technology and the mess of paper - all of this happens
despite the agency receiving evermore responsibilities: stimulus checks, child tax credit payments, Obamacare enforcement, foreign bank account tracking and, lately, hunting down Russian yachts. Without reliable, long-term funding guarantees, the IRS has struggled to upgrade its systems.
What will the service, technology, and audit programs be able to do if the funding is maintained? The Congressional Budget Office estimates the IRS will "increase revenue by $204B over the next decade." That money will help pay for all the programs the government creates - programs championed by Democrats and Republicans alike.
One more thing.
Should you be angry because the IRS is going to be able to better perform all aspects of its job, if it gets the funding? Nope.
I used to say there’s no Democratic or Republican way to run the IRS,” Koskinen says. “The people who are significantly disadvantaged are the average taxpayers who have a simple question and can’t get through. Those are Republicans as well as independents and Democrats.”
McCarthy's starting his tenure with a lie; I'll end this post with a truth. In a December 15, 2022 report, the Government Accountability Office said the IRS
... addressed its backlog of 2021 paper returns. However, as of late September 2022, IRS had about 12.4 million returns to process, resulting in refund delays for millions of taxpayers.
That's a two-million-plus increase in the backlog - since last July. It's only going to get worse if this funding is cancelled.
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