9.2 C
New York

Key Democrat outlines 5 priorities for $80 billion in IRS funding


Senate Finance Committee Chairman Ron Wyden, D-Ore., questions IRS Commissioner Charles Rettig at a Senate Finance Committee hearing.

Tom Williams | Pool | Reuters

Senate Finance Committee Chairman Ron Wyden, D-Ore., has outlined five priorities for the nearly $80 billion in IRS funding enacted in August through the Inflation Reduction Act. 

Wyden shared expectations for the 10-year investment — including customer support, technology, audits for the rich, offshore tax evasion and criminal investigations — in a letter to Treasury Secretary Janet Yellen and IRS Commissioner Charles Rettig.

These priorities are on top of implementing other tax provisions, similar to clean energy credits, medical health insurance subsidies and others, he wrote.

More from Personal Finance:
Biden’s student loan forgiveness could cost $379 billion over 30 years
The tax extension deadline is Oct. 17. Be careful for these 3 common errors
As demand soars for Series I bonds, TreasuryDirect gets a makeover

“As you have got explained, the funds won’t be used to extend the audit rate relative to historical levels for those making lower than $400,000,” Wyden emphasized. 

Here’s a breakdown of the five priorities:

1. Boost customer support 

Wyden urged the IRS to enhance customer support by clearing the backlog of unprocessed tax returns prior to next 12 months’s filing season, pushing for infrastructure investments to “ensure these backlogs don’t return,” Wyden wrote.

As of Sept. 23, the IRS had 6.2 million unprocessed individual returns received this 12 months, including tax 12 months 2021 returns and late filings from previous years, in response to the agency.  

2. Put money into technology

Wyden also asked for technology upgrades, to “improve service and enforcement,” making it easier to process third-party tax forms and flag errors to start audits more quickly.

“System upgrades should help the IRS use this data to catch tax cheats and reduce the likelihood that it is going to query accurate returns,” he wrote.

3. Increase audits of the rich

Wyden also highlighted the necessity to “rebalance audit rates,” between wealthy and lower-income taxpayers, by hiring more revenue agents.  

IRS audits dropped by 44% between fiscal years 2015 and 2019, in response to a 2021 report from the Treasury Inspector General for Tax Administration. Audits dropped by 75% for filers making $1 million or more, and 33% for low-to-moderate earners claiming the earned income tax credit, often known as EITC.

In 2021, the U.S. Department of the Treasury estimated there is a $600 billion annual “tax gap” between what’s owed and picked up, which can amount to roughly $7 trillion in lost tax revenue over the subsequent decade.

4. Pursue offshore tax evasion 

One other priority is to crack down on “a whole bunch and hundreds of shell firms in offshore tax havens” that increase the chance of underreported income, in response to the letter.

Wyden encouraged the IRS to develop a “more robust” whistleblower program, to partner with individuals to “unpack sophisticated schemes.” He said this program has delivered a “huge return on investment.”  

5. Rebuild criminal investigations

Wyden also pushed to rent more special agents for the IRS’ criminal investigations division, citing a lack of about one-quarter of its workforce since 2010.

The letter comes because the IRS funding continues to be a hot-button issue amongst critics, with some saying the resources may goal on a regular basis Americans.

Nonetheless, Yellen responded to those claims in a letter to Rettig on Aug. 10.

“Specifically, I direct that any additional resources — including any latest personnel or auditors which can be hired — shall not be used to extend the share of small business or households below the $400,000 threshold which can be audited relative to historical levels,” she wrote.

Get the latest Sports Updates (Soccer, NBA, NFL, Hockey, Racing, etc.) and Breaking News From the United States, United Kingdom, and all around the world.

Related articles


Recent articles