In case you missed it: IRS Commissioner Chuck Rettig wrote a column that appeared in Thursday’s issue of The Washington Post. In the piece, Commissioner Rettig discusses the importance of providing the IRS with vital funding during the next decade and encouraged Congress to approve the $80 billion IRS funding proposal included in the Biden administration’s Build Back Better (BBB) plan.
The House Rules Committee on November 3 released the amended text of H.R. 5376, Build Back Better Act. As written, the IRS would receive approximately $80 billion in additional funding over the next decade. Specifically, the proposal would appropriate through September 30, 2031:
$1,931,500,000 for filing, education, account, and other taxpayer services;
$44,887,500,000 for enforcement, investigative, litigative, and digital asset monitoring and compliance activities;
$27,376,300,000 for supporting internal operations and expenses;
$4,750,700,000 for the agency's business systems modernization program designed to improve communications with customers; and
$15,000,000 for the development of a free "direct efile" tax return system.
The allocated amounts are on top of the usual IRS funding.
As Rettig writes in the piece, the IRS's workforce "is the same size as in 1970" and has "fewer than 15,000 people to handle" taxpayer phone calls. The shortage of auditors has resulted in a 60% drop in audits of taxpayers with over $1 million in annual income over the past decade.
According to Rettig, the funding boost would increase taxpayers' access to answers surrounding refunds, economic relief, and account-related issues. "We want to be able to answer the phones and respond to questions," Rettig writes. "But to do all this, we need help. We desperately need sufficient resources to be able to appropriately serve and support you and our country."
The IRS Also Lacks The Means To Adequately Hold
Wealthy Individuals And Large Corporations Accountable.
An Estimated 15% Of Taxes "Are Uncollected Each Year," Largely Because Of Personnel And Technological Gaps.
"Every American should agree that it is unacceptable for our nation's tax administrator to be 'outgunned' when appropriately challenging aggressive moves by some of the most sophisticated taxpayers."
The prospect of a well-equipped IRS seeking to close the "tax gap" which is, the difference between taxes owed and collected, by raising revenue collections has drawn the ire of some conservative groups and members of the banking industry.
Earlier this year, a squad of Republican notables, including former Vice President Mike Pence's chief of staff, created the Coalition to Protect American Workers in direct opposition to President Biden's tax agenda. In May, the group - through Building America's Future - released an ad against the IRS funding proposal.
"Biden's massive tax increase plan includes a staggering $80 billion to help recruit an army of IRS agents, agents aggressively coming for every dime they can grab at your house and our small businesses," the ad's narrator says before instructing taxpayers to urge Rep. Matt Cartwright, R-Pa., to reject the president's plan.
More recently, a Twitter campaign using the #KeepMyBankingPrivate hashtag has gained steam on the platform as financial institutions and related groups rally against a Treasury proposal that would require banks to disclose additional data on accounts with total annual transactions over $600.
To many opponents, giving the IRS more money would result in invasions of privacy, government overreach, and lengthy audits.
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Read more at: Tax Times blog