Tipsheet

IRS on Steroids: Dems to Double Agency's Size, Refuse to Protect Non-Rich Taxpayers from New Audits

Guy Benson
Guy Benson  |  August 08, 2022 10:25 AM

There are many things to hate about Democrats' so-called 'Inflation Reduction Act' -- not the least of which is the fact that it won't reduce inflation, with that phenomenon raging at decades-high levels.  The White House's rosiest estimate is that the bill would possibly reduce inflation by a fraction of one percentage point, nine years from now.  Several nonpartisan estimates project that it will increase inflation in the short term, and effectively have zero anti-inflationary effect beyond that.  It also raises taxes on American businesses, costs that will inevitably be passed down to workers and consumers.  The nonpartisan Joint Committee on taxation found that these tax hikes would end up hitting Americans in every income group.  Democrats want to play rhetorical games and pretend these don't represent tax increases on middle- and working-class people.  But the effect is what it is.  Then there's the provision that massively increases the auditing capacity of the dreaded Internal Revenue Service:

A large cash infusion for the Internal Revenue Service is part of the economic package Democrats are working to push through Congress before their August break. Under a deal worked out by Senate Majority Leader Chuck Schumer and West Virginia Sen. Joe Manchin, the Inflation Reduction Act of 2022 would spend an extra $79.6 billion on the agency over the next 10 years.  The added cash is expected to go toward hiring 87,000 new IRS agents, roughly doubling the agency’s size. The IRS says the money is expected to go toward efforts to crack down on wealthy tax evaders and to modernize its technology...Republicans are warning it will lead to increased scrutiny of small business owners and IRS audits will affect more people.

This is quite a statistic, especially in light of what's happening at the border:


The IRS is dutifully playing along with Democrats' talking points, insisting that despite doubling the agency's size and hiring a small army of new agents and auditors, non-rich taxpayers won't be impacted.  Republicans are pointing out that the bill doesn't actually protect lower income groups from a newly-muscular and cash-flush IRS.  Rhetorical promises (to say nothing of the manipulations explained below) are meaningless if they have no force of law.  And they have no force of law:

President Biden has repeatedly tried to mislead the public about his dangerous IRS expansion by claiming that audit rates will not rise for households making less than $400,000 “relevant to recent years.” But the truth is hidden in that phrase. A Congressional Budget Office analysis makes clear that under this plan, audit rates will “rise for all taxpayers” and the policy “would return audit rates to the levels of about 10 years ago.” A simple, conservative analysis applying 2010 audit rates to recent tax filing data demonstrates that the policy will result in 1.2 million new audits per year with over 710,000 of those new audits falling on taxpayers making $75,000 or less.

The Democrats and their friends at the IRS are insulting voters' intelligence, hoping they'll believe empty assertions, and that they don't notice that the nonpartisan Congressional Budget Office's finding that audit rates will rise for all taxpayers.  The Senate GOP gave Democrats an opportunity to actually enshrine their 'no increased audits for those making under $400,000' lie within their legislation, and every single member of Chuck Schumer's caucus voted it down, killing it:


Here's the roll call.  All 50 Republicans voted in favor of this amendment, and every last Democrat voted no --  Senators Maggie Hassan, Catherine Cortez-Masto, Raphael Warnock, and Mark Kelly among them.  They had the opportunity to back up their words with law, and they declined, en masse.  Telling.  Susan Collins also tried to come at the issue from another angle:

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That vote was also 50-50, with all Democrats in opposition.  The provision was blocked.  On top of all of that, this is pretty extraordinary: Remember the insufferably arrogant, Obama-era IRS chief John Koskinen?  He spent years agitating for increased funding to the IRS, which the GOP staunchly opposed, especially in light of the agency's outrageous political targeting scandal.  He was the face of a rapacious IRS, arguing that it needed much more taxpayer money in order to collect taxpayers' money more efficiently.  But even John Koskinen is telling the New York Times that Democrats' new money infusion comes with an insane price tag and goes well beyond that the agency could possibly spend properly:


This champion for increased IRS funding believes the agency needs $25 billion in additional appropriations.  Democrats are more than tripling that number, handing the agency more money than it'll know what to do with -- while unanimously refusing to write protections for Americans making less than $400,000 into their legislation.  That tells you everything you need to know.  I'll leave you with this garbage argument Democrats find themselves forced to make:


Versions of the "if you've got nothing to hide" justifications of increasing intrusive government powers are equally horrendous.  And Americans broadly understand, either intuitively or through personal experience, that it's not just tax cheats who have much to fear from the nightmarish, life-upending process of IRS audits.  And here's my bottom-line summary of the overall bill, which the Senate passed 51-50 on Sunday afternoon: