IRS CRACKDOWN TO GET REVENUE
IRS crackdown to get revenue. With the Biden Administration spending so much to combat the impact of the economic disaster from the Covid health crisis, one part of the plan has been to infuse the Internal Revenue Service with more funds, to go after those who owe back taxes and those who have not filed tax returns. Over $80 billion has been spent to upgrade the IRS, including a massive hiring spree, overhaul of the computer system, and revamping the strategy, to align with a 21st Century View of collecting more revenue to combat ever growing deficits. Administration officials have concluded that an aggressive crackdown on tax avoidance by corporations and the rich could raise at least $700 billion on net over ten years, possibly upwards of $1 trillion. The rich may actually need tax resolution services. The $80 billion in proposed funding would be an increase of two thirds over the agency’s entire funding levels for the past decade. IRS crackdown to get revenue.
The administration is expected to portray the $780 billion it expects to collect through enhanced enforcement as conservative, That figure includes only money directly raised by enhanced tax audits and additional reporting requirements, and not any additional revenue from people or companies choosing to pay more taxes after previously avoiding them. Previous administrations have long talked about trying to close the gap–the amount of money that taxpayers owe but that is not collected each year. This month, the head of the IRS, Charles Rettig, told a Senate committee that the agency lacked the resources to catch tax cheats, costing the government as much as $1 trillion a year. The agency’s funding has failed to keep pace with inflation in recent years, amid budget tightening efforts, and its audits of rich taxpayers declined.
Mr. Biden aims to change that. His economic team includes a University of Pennsylvania Economist, Natasha Sarin, whose research with the Harvard University’s economist Lawrence Summers suggests that the United States could raise as much as $1.1 trillion over a decade via increased tax enforcement.