A Rogue IRS Is a Tax on Affordability. Voters Are Taking Note This November.

Running a small business is hard enough. Owners are already navigating inflation, labor shortages, rising insurance costs, and countless regulations. They shouldn’t have to add fear of an unpredictable IRS to the list. Today, many businesses aren’t just concerned about the taxes they owe—they’re worried about whether an audit, a prolonged dispute, or shifting IRS interpretations could jeopardize everything they’ve built. That uncertainty has become an unnecessary cost of doing business. This November, voters have a chance to change it.

Americans deserve a tax system they can understand, plan around, and trust. Instead, too many taxpayers face uncertainty over how the IRS will interpret the rules, when it will audit them, or how long it will take to resolve a dispute. Small business owners, in particular, can’t afford that kind of uncertainty. Washington should reform the IRS to make the tax system more predictable, more transparent, and fairer for everyone. With affordability a top concern for voters, now is the time to act.

The rising prices of groceries, rent, gas, and everything in between over the past six years have created a cost-of-living crisis that is squeezing millions of hardworking Americans and their businesses. Every dollar and every hour matters more than it did two years ago, which is exactly why IRS uncertainty deserves a place in this conversation. Every unpredictable audit, every dispute that drags on beyond its merit, and every hour a small business owner spends fighting the IRS is stealing already-tight resources that don’t go toward a business’s payroll and inventory, or a family’s own income. For businesses and families alike, there is no ability to plan for the future when these issues compound the inflationary pressures already at work. IRS reform has become a kitchen-table issue because an expanded IRS, in the rogue state it currently operates, might just deal the final blow to millions of Americans across the country.

A report commissioned by the Small Business & Entrepreneurship Council and conducted by Oxford Economics found that tax enforcement uncertainty is a significant and understated burden on American businesses, particularly small businesses. The study found that reducing uncertainty could unlock up to $118.8 billion in new private-sector investment and $1.4 trillion in additional business revenue each year, while creating up to 4.3 million new jobs and cutting compliance costs by up to $8.8 billion annually. It also found that 71 percent of small business owners say enforcement uncertainty makes it harder to compete with larger companies, and that over a third avoid claiming tax credits they’re legally entitled to out of fear it will trigger an audit. Nearly three in five businesses report spending nine percent or more of annual revenue on compliance alone. As it stands, the IRS is wreaking havoc on growth and punishing good-faith tax compliance.

It’s not surprising that Alliance for IRS Accountability's recent polling found that a majority of Americans rate IRS customer service negatively and 78 percent say the agency needs to be held to a higher standard. Additionally, two-thirds support shifting the burden of proof in tax disputes so that the IRS must substantiate its claims before penalizing a taxpayer, rather than forcing Americans to prove their own innocence against an agency with far greater resources. More important than ever in today’s climate, our polling found bipartisan consensus on these issues—shared frustration with an agency that has lost the trust of the people it’s meant to serve.

AIA’s Presumption of Rights Agenda offers a roadmap for the common-sense, actionable reforms that will give taxpayers clear guidance, eliminate the guilty-until-proven-innocent status quo, and unburden Americans and their businesses from compliance chaos. This election season, candidates who want to truly answer to Americans’ affordability concerns should be able to speak to a simple question: What will you do to end IRS uncertainty for the very people who send you to Washington? American taxpayers will listen closely to their answer.

Chuck Flint is President and CEO of the Alliance for IRS Accountability.

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