The Internal Revenue Service, unlike some other three-letter agencies, is rarely the subject of thriller books or action films. But to hear Republicans’ recent fearmongering, you wouldn’t know it.
These claims, which have spurred right-wing threats credible enough to prompt a nationwide security review of IRS facilities, are exaggerated. The 87,000 employees the IRS hopes to hire, for instance, won’t all be enforcement agents — and many of them will be replacing the 50,000 or so workers expected to retire in the next decade. Far, far fewer will be armed; that privilege is reserved for members of the division with jurisdiction over federal tax crimes, including money-laundering, financial fraud and cyber and narcotics-related offenses — the same unit that brought Al Capone to justice nearly a century ago.
Most important, when it comes to putting poor Americans in the crosshairs, GOP critics are getting things backward. The IRS has seen its budget depleted by more than 20 percent in inflation-adjusted terms over the past decade, despite taking on more (and more complicated) responsibilities. This resource crunch has led to a plummet in audits of millionaires and corporations: The overall gap between what’s owed to the government and what’s paid to the government could amount to as much as $1 trillion each year. Its enforcement staff in particular has decreased by more than 30 percent in the same period; the staff specializing in the most sophisticated audits has decreased by more than 40 percent, which means the IRS can audit only about 7,500 out of the 4 million most involved returns each year.
Republicans seize on the $75,000 figure because more than half of last year’s audits targeted taxpayers below that threshold. Yet this is in large part because auditing poorer Americans is cheaper than auditing rich ones — and the IRS can’t afford much these days. Furnishing the agency with more funds would allow it to focus on the biggest earners, and the biggest cheaters, rather than those with less in their pockets. That’s precisely the policy Treasury Secretary Janet L. Yellen says the Biden administration will pursue. Her department has issued a corresponding directive that audit rates shouldn’t rise for households making less than $400,000 a year.
This does not mean that small businesses, for example, should get a pass. No one is exempt from following the law. Cheats place the burden of financing government services on honest taxpayers.
But all this is much less cinematic than the tens of thousands of armed agents Republicans are urging Americans to imagine.
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