GOP Rep. Cline: IRS Is Going After Regular People, They’re Policing $600 Transactions
On Tuesday’s broadcast of Newsmax TV’s “John Bachman Now,” Rep. Ben Cline (R-VA) said that Republicans took up repealing funding for increased IRS agents as their first act in the House majority because increasing the size of the agency, combined with the IRS requiring people to report transactions above $600 would create a massive amount of IRS intrusiveness into the lives of everyday people.
Cline stated, “They wanted to increase taxes on the American people and they want to increase the number of Americans taxed. And so, they’ve increased, by 87,000 staff and agents, the number of IRS employees, and they’re going to be increasing the number of audits. Those audits are going to be targeting not just the super-rich, but hard-working Americans, small businesses. And so, with that, combined with the new snooping that they’re going to have into your Venmo transactions, anything above $600 is going to have to be reported to the IRS. The combination of this intrusiveness is really, really resonating with the American people. They’re not going to have it. And so, that’s why the very first bill that we acted upon in the new Congress was to repeal funding for those 87,000 IRS staff and agents.”
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Poor People Five Times More Likely Than Average Earner To Be Audited by Biden IRS
Just 1 percent of those making $1 million per year in income faced a regular audit
Joseph Simonson • January 7, 2023 5:00 amPoor people faced a significantly higher chance in 2022 of being audited by President Joe Biden's IRS than both rich and middle-class earners, according to a Syracuse University study.
In fact, no group faced as much scrutiny from the IRS as those who made below $25,000, the university's data-gathering center found. Among families that benefited from the earned income tax credit, a rebate on income and payroll taxes made available to the nation's poorest families, 1.27 percent were audited. The IRS in 2022 audited just 0.19 percent of the vast majority of taxpayers, meaning the poorest families were at least 550 percent more likely to have the IRS knock on their door than the average filer.
These families were also more likely to receive a regular audit by the IRS than families that reported over $1 million in income, of which just over 1 percent faced regular audits. In total, the IRS audited a total 626,204 taxpayers out of more than 164 million in the 2022 fiscal year. The bulk of those audits were of filers in the lowest income group.
The new data raise questions about the IRS's auditing strategy as it stands to benefit from $80 billion in new funding that the Biden administration plans to use for new hires. Republicans have alleged that despite White House promises to the contrary, middle-class and poor Americans will face more audits due to the 87,000 new IRS employees the agency plans to hire.
The agency does not publicly disclose its auditing data. Syracuse University's Transactional Records Access Clearinghouse, a nonpartisan data gathering and distribution organization, went to court to obtain the information through a Freedom of Information Act request. How the IRS decides exactly whom it will audit is largely a mystery.
"Answering this question remains a key challenge that Danny Werfel faces if confirmed as the new IRS commissioner," the authors of the report write, referring to Biden's nominee to lead the revenue service. "One of his first orders of business should be lifting this secrecy curtain. He needs to put in its place a full and detailed transparency program to keep the public informed on how these new funds are being applied in the selection of taxpayers for stepped up audits."
"Republicans have attacked funding for the IRS for years in an effort to protect wealthy tax cheats, who are responsible for $163 billion in tax evasion per year," a White House spokesman told the Washington Free Beacon. "President Biden’s Inflation Reduction Act, which is only beginning to rebuild enforcement for wealthy Americans, will finally force wealthy tax cheats to pay their fair share while making it easier for working Americans to get their tax refunds."
The IRS did not respond to a request for comment.
Then-IRS commissioner Charles Rettig testified before Congress last August that the IRS would not increase audits of households earning less than $400,000 if it received the additional funding sought by Biden. Democrats have long claimed that part of the reason the IRS audits poor households so frequently is because it lacks resources to go after wealthy tax cheats, who can afford lawyers and accountants.
"These resources are absolutely not about increasing audit scrutiny on small businesses or middle-income Americans," Rettig said at the time.
A Congressional Budget Office report last year concluded that the IRS will collect billions of dollars from auditing low- and middle-income Americans, thanks to the new staff funded by the Inflation Reduction Act. The report found that audits of taxpayers making under $400,000 will account for $20 billion in additional revenue.
The IRS has faced accusations, including from its own internal watchdog, that its auditing practices discriminate against low-income earners. The National Taxpayer Service stated in its 2021 annual report that the IRS is focused on sending as many audits as possible rather than customer service.
"Lower-income taxpayers … are not assigned a single point of contact and have a hard time reaching the IRS," the watchdog's report said. "The IRS often closes its audits without any contact from the taxpayer. This creates additional downstream consequences for these taxpayers and the IRS."
House Republicans Vote To Cancel Biden’s Billion-Dollar IRS Funding
Anna Allen • January 10, 2023 3:10 pmHouse Republicans, in the first act of their tenure in the majority, voted on Monday to rescind nearly $71 billion of the $80 billion that the previously Democratic-controlled Congress allocated to the IRS through the so-called Inflation Reduction Act.
The House passed the bill 221-210 along party lines, though the cancellation of funds will likely not make it past the Democratic majority in the Senate. The bill is part of House Republicans' campaign promise to "hold the administration accountable."
The Inflation Reduction Act, passed in August, allocated $80 billion to more than double the IRS workforce, which would make the agency larger than the Pentagon, State Department, FBI, and Border Patrol combined. Proponents of the bill argued that better IRS audits and scrutiny would target wealthy corporations that hide their income. According to a study from the nonpartisan Joint Committee on Taxation, the majority of the new revenue gained from IRS audits will actually come from those making less than $200,000 a year.
President Joe Biden in a statement Monday dismissed the Republicans' act, calling it "a reckless bill." Democrats argue that vetoing the funds only aids large corporations and puts more of the burden on middle-class Americans.
"With their first economic legislation of the new Congress, House Republicans are making clear that their top economic priority is to allow the rich and multibillion-dollar corporations to skip out on their taxes, while making life harder for ordinary, middle-class families that pay the taxes they owe," the White House said.
A Syracuse University study found, however, that in 2022 those who made below $25,000 were at least 550 percent more likely to be audited by the IRS than the average taxpayer.
"The IRS does not need a raise—it needs a reckoning," Rep. Jason Smith (R., Mo.), the recently elected chairman of the powerful House Ways and Means Committee, said about the bill.
Rep. Jeff Duncan (R., S.C.) said the money Democrats provided to the IRS had one purpose: "to go after small businesses [and] hard-working Americans to try to raise money for … reckless spending that has caused $31 trillion in debt in this nation."
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