Even Treasury Admits Potential for New IRS Audits of Middle Class
Democrats are scrambling to pass a plan that would include the hiring of 87,000 new IRS agents making the agency larger than the Pentagon, State Department, FBI, and Border Patrol combined. But while Democrats claim these agents will be used against large corporations and wealthy individuals, new audits would hit low- and middle-income earners and small businesses, even according to top Treasury officials.
Top Biden Treasury officials have admitted it is the share of audits that will not change in a recent letter:
“Specifically, I direct that any additional resources—including any new personnel or auditors that are hired—shall not be used to increase the share of small business or households below the $400,000 threshold that are audited relative to historical levels.”
In lawmaking, words matter:
- An Unfair “Share”: The IRS plans to double the number of audits, while the share of audits on small businesses remains constant. That means twice the amount of small businesses will be audited. This increases the chances of audits for companies and individuals making less than $400,000 per year.
- Existing Resources Are Fair Game? Specifying that “any additional resources” won’t be used for new audits means the IRS could still use “existing” resources to increase audits on Walmart shoppers. There is no commitment by Treasury against doing so.
- Low-Income Americans Still Hit Hard: CBS reports that currently, households with less than $25,000 in annual earnings are five times more likely to be audited by the IRS than everyone else. More IRS enforcement personnel will result in increased audits for these earners.
- Non-partisan Scorekeeper’s See More Audits for Lower Earners, Middle Class: Estimates from the Joint Committee on Taxation, 78 to 90 percent of the revenue collected from under-reported income will come from tax filers earning less than $200,000 a year. Just 4 to 9 percent of new revenue will come from those earning more than $500,000 a year. The plurality of new audits will be on Americans making between $1 a year and $25,000 a year. Isn’t Biden-Flation and a recession bad enough?
As Americans for Tax Reform writes in their analysis, “Democrats’ plan to unleash 87,000 new IRS agents – instructed to “find more money” – on already-struggling Americans is incomprehensible. In addition to a recession and record-high inflation, Americans can expect to be further crushed…”