Last week, U.S. Sen. Catherine Cortez Mastro, D-NV, voted to pass the nonpartisan Inflation Reduction Act of 2022, which would earmark $80 billion to hire new Internal Revenue Service agents who would have the authority to audit Americans with no limits on income.
Republicans are calling the legislation a “reckless tax and spending bill.”
“The nonpartisan Congressional Budget Office has recently confirmed that a significant portion of revenue that the IRS supersized funding Democrats claim will be forthcoming comes from audits that will squeeze tens of billions out of taxpayers earning less than $400,000,” Republican U.S. Sen. Mike Crapo said when he delivered remarks on the Democrats’ inflation.
The legislation would allow the IRS to address the expected retirement of agents in the coming years, according to the Associated Press. The $80 billion in earmarked funds to hire new agents is more than six times the current IRS budget.
Crapo, a ranking member of the Senate Finance Committee, filed an amendment to the bill that would prevent the IRS from using the $80 billion for audits of taxpayers with taxable incomes lower than $400,000. This includes both individuals and small businesses.
“The reality is a significant portion raised from their IRS funding bloat would come from taxpayers with income below $400,000,” he told The Free Press. “My colleagues and Americans know the real answer: small business owners, cash-heavy businesses, and those who can’t afford legal teams are easy targets for the new IRS agents and their audits.”
Crapo added that Americans can expect “more taxes, more spending, higher prices, and an army of IRS auditors” from the Inflation Reduction Act.
According to a May report from the Government Accountability Office, audits decreased for all income levels from 2010 to 2019, but rates for taxpayers with incomes of $200,000 and above declined the most. IRS officials said this was due to reduced staffing and decreased funding. Lower-income audits are also generally less complex and more automated, so they can still be conducted with fewer staff.
Syracuse University’s Transactional Records Access Clearing House analysis found that wage earners with less than $25,000 in total earnings were audited at a rate five times higher than all taxpayers in the fiscal year 2021.
“The IRS absolutely targets lower-income taxpayers for audits, in my opinion,” Benjamin Wilkerson, an attorney at North Mississippi Rural Legal Services, said to Just the News.
