(The Center Square) – President Joe Biden’s call for funding for 87,000 IRS agents to audit Americans has raised questions about whether the new rash of auditing will target poorer Americans or be politically motivated.
The Inflation Reduction Act included $80 billion to beef up IRS efforts, which Biden says will more than pay for itself in new audits.
Biden’s nominee to lead the Internal Revenue Service, Daniel Werfel, addressed concerns over this policy at his recent confirmation hearing but promised lawmakers the audits would target wealthier Americans.
“Audit and compliance priorities will be focused on enhancing the IRS’ capabilities to ensure America’s highest earners comply with applicable tax laws,” Werfel said.
Critics have argued, though, there are not enough wealthy Americans to audit to justify tens of billions of dollars for auditors. They also argue the IRS’ behavior in recent years suggests the IRS will go after poorer and conservative Americans.
“The Joint Committee on Taxation, Congress’s official tax scorekeeper, said that 78% to 90% of the money raised from under-reported income would likely come from those making less than $200,000 a year, with nearly half of the audits hitting Americans making $75,000 per year or less,” House Ways and Means Republicans said in a statement.
The Informing America Foundation released a new report detailing the IRS’ recent missteps.
“The IRS is targeting low-income Americans and conservative nonprofits,” the report said. “President Biden massively expanded the IRS, which improperly scrutinized conservative nonprofits, Americans in the black belt, and more.”
The IRS reached a $3.5 million settlement with hundreds of Tea Party groups in 2018 after news broke that the Obama administration’s IRS targeted those groups.
In 2021, the IRS had to overturn its own ruling after it denied a Christian group nonprofit status. The agent who made the ruling said the group did not qualify because “Bible teachings are typically affiliated with the [Republican] party and candidates.”
Christians Engaged, the group in question, was able to get the ruling overturned, but critics say this kind of case shows the mentality of at least some IRS employees.
“The recent determination on Christians Engaged’s tax-exempt status further exposed the corruption and liberal bias running rampant at the IRS,” U.S. Rep. Chip Roy, R-Texas, said at the time. “This discriminatory action against a Christian nonprofit is an overt attack on religious liberty by a tyrannical federal government. Moreover, this decision comes at a time when members of both parties are trying to increase the ability of the IRS to harass individual Americans, businesses, and organizations.”
Just this year, the IRS announced a program to crack down on tip reporting from waiters and waitresses.
“Strange. I was reliably told that the expanded IRS would only target the rich,” Hunter Estes, communications director for Mississippi Gov. Tate Reeves, wrote on Twitter.
The House Ways and Means Committee sent a letter earlier this month to the Biden administration raising questions about how thousands of IRS documents were leaked to ProPublica. The leak may have had political motives, since it was used to prove, as ProPublica put it, that “the very richest pay lower rates than the merely rich.”
Treasury Secretary Janet Yellen told the Senate Finance Committee in June 2021 that she would look into the leak, but so far Congress has received few answers.
America First Legal, a conservative group led by former Trump administration officials, also has raised concerns about the Treasury Department’s recent equity commitments. They say those policies could be used to make decisions about who to audit based on race.
“The notion that race should play any role whatsoever in the IRS’s operations is absurd, offensive to the American ideal, and illegal,” said Gene Hamilton, America First Legal Vice-President and General Counsel. “But the Biden administration is so blinded by its relentless obsession with race that it is willing to make IRS enforcement decisions based on the race of American citizens. We will fight their attempts to erode equality under the law and expose their attempts to inject toxic ‘equity’-based policies throughout the federal government.”