With Biden Funding, IRS To Actually Audit More Rich F*ckwads Than Poor People!
An objective assessment of how this is an absolutely fucking necessary good first step.
The Internal Revenue Service announced last week that as part of its “strategic operating plan” for this year and next the agency intends to ramp up the rate at which it audits the wealthiest individual taxpayers and giant corporations, while not increasing audits of small businesses or the middle or working class. Not that the news will mollify rightwingers who invoke terrifying visions of an “army of IRS agents” coming to raid your Nana’s little curio shop and marijuana dispensary at the mini-mall.
The IRS plans to increase by about 50 percent audit rates of individuals with more than $10 million in income, going from 11 percent of those fat cats in 2019 to 16.5 percent of them in the 2026 tax year.
Audit rates for “large corporations with assets over $250 million” should nearly triple, from 8.8 percent in 2019 to 22.6 percent by tax year 2026. The agency will also seek a “nearly ten-fold” increase in audits of “large, complex partnerships with assets over $10 million.” There, the percentages are actually relatively small, increasing from just a tenth of one percent in 2019 all the way up to a full percent by 2026. We guess that “large complex” thing complicates auditing them.
The additional funding to go after wealthy tax cheats comes from 2022’s Inflation Reduction Act, which provided a much-needed boost — $78 billion over 10 years — not only to hire more agents to do audits, but also to significantly upgrade the agency’s antiquated computer systems, improve customer service, and improve the accuracy and speed of processing tax returns. The money was desperately needed after more than a decade of budget cuts by Republicans, even as the population and the complexity of corporate tax returns increased.
Republicans have since demanded cuts to the new funding as the price of keeping the government open, because making life good for wealthy tax cheats and corporations is the only thing the GOP actually considers a legislative priority. Their attempts to completely roll back the new funds have so far failed completely, although that is of course a central goal on the GOP’s Project 2025 wish list, which would also roll back pretty much everything else in the IRA from negotiated Medicare drug prices to all of the measures aimed at controlling climate change.
Or we could reelect Joe Biden, give him Democratic majorities in both houses of Congress, and save the world, or at least democracy and the climate and abortion rights and marriage equality and Obamacare and Social Security and Medicare and … you get the idea. Biden’s planned reelection budget would also restore the $20.2 billion in new IRS funding the GOP has managed to cut.
CNN notes that while audits will be increasing substantially, overall audit rates
won’t exceed those reached in 2010 because the number of filings by large corporations, partnerships and wealthy individuals have grown and become more complex, the IRS said.
Hey, speaking of who gets audited, let’s just offer a belated Thank You to the IRS (yes, really!), the Biden administration, and Sen. Ron Wyden (D-Oregon) for yet another of those changes this administration insists on making, so government works better for more Americans. Wyden has long called attention to an awful disparity in IRS audits: While the agency mostly audits returns of the very rich, since that’s where the money is, budget cuts have led the IRS to increasingly higher rates of audits for the very poor, who have no money but are easier to go after.
That’s finally changing: We missed it at the time, but in a letter to Wyden last fall, IRS Commissioner Daniel Werfel confirmed that, given the new focus on auditing wealthy taxpayers and corporations (and the funding to do it), the agency is “substantially reducing the number of correspondence audits focused specifically on certain refundable credits” that are primarily used by low-income people, including the Earned Income Tax Credit (EITC), American Opportunity Tax Credit, Health Insurance Premium Tax Credit, and Additional Child Tax Credit.
This, folks, is fucking HUGE and I’m so sorry to be months late in learning about it. As ProPublica reported in both 2018 and 2019, the IRS since 2015 had greatly increased its audits of the poorest Americans, largely because the agency had lost so many auditors since 2010. As then-IRS spokesperson Dean Patterson admitted to ProPublica in 2019, EITC audits could easily be conducted by short-staffed IRS offices, making them
“less burdensome for taxpayers than in-person audits as they mail in their documentation and don’t have to take time out of the workday,” Patterson said.
“Correspondence audits are also the most efficient use of IRS’ limited examination resources.”
“Less burdensome.” How’s that for some spin?
How bad was the problem? ProPublica found that “millionaires in 2018 were about 80% less likely to be audited than they were in 2011.” Worse, while EITC recipients typically made less than $20,000, they had an audit rate about the same as the nation’s top One Percent of earners that year, 1.41 percent to the rich bastards’ 1.56%. Considering that the US has far more low-income folks than billionaires, that’s shocking.
And now it’s fixed and the IRS will be using its audit resources to get back more of the money owed by greedhead cheaters, amen.
We would go into more about how the IRS has also improved its customer service and IT infrastructure, but frankly we’re just to happy to report that it’s going to back off audits of the poor and increase audits of the rich and corporations that we’ll leave it at that and underline once more why we do not need a wealthy business frauder back in office to spread more fraud to the actual billionaires he wishes he was, thank you very much.
PREVIOUSLY!
[IRS announcement / IRS Strategic Operating Plan 2024 update / CNN / Kiplinger Personal Finance / ProPublica]
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What a coincidence. The wifey has a job interview tomorrow with the IRS audit department. She's currently working on her master's in forensic accounting. Good thoughts are always welcome. I wanna get me some of those nice gubmit benefits! 😋