President Joe Biden’s Inflation Reduction Act would allow the Internal Revenue Service (IRS) to hire up to 87,000 new employees while increasing taxes for most Americans, according to multiple reports.
The Inflation Reduction Act, negotiated by Senate Majority Leader Chuck Schumer (D-NY) and Senator Joe Manchin (D-WV), would give the IRS nearly $80 billion. In previous versions of this bill, the Biden administration estimated that the new funding would allow the agency to hire up to 87,000 additional employees, according to Bloomberg Law.
Senator Ted Cruz (R-TX) recently told Fox News’ Sean Hannity that the “massive influx” of agents “are not there to go after the billionaires or the giant corporations they are there to go after you. They’re going after small businesses. They are there to descend upon middle-class workers and audit the hell out of you.”
For its part, the IRS denied such a characterization and said it would target high-net-worth Americans and corporations who are “noncompliant taxpayers.”
“Large corporate and high-net-worth taxpayers often engage teams of sophisticated representatives pursuing unsettled or sometimes questionable interpretations of tax law,” Charles Rettig, the IRS commissioner, said before Congress this week, reported The New York Times. “The integrity and fairness of our tax administrative system relies upon the ability of our agency to maintain a strong, visible, robust enforcement presence directed to these and other similarly situated noncompliant taxpayers.”
The Wall Street Journal Editorial Board also warned that the IRS would go “beast mode” if the Inflation Reduction Act becomes law.
“The bill earmarks $45.6 billion for ‘enforcement,’ including ‘litigation,’ ‘criminal investigations,’ ‘investigative technology,’ ‘digital asset monitoring’ and a new fleet of tax-collector cars,” The Journal noted. “The result will be far more audits, civil suits and criminal referrals.”
The Journal asserted that the increased funding isn’t related to a shortage of revenue, rather it is because of the federal government’s increased spending.
“The federal government isn’t starving for revenue,” the paper claimed. “Congress wants more tax revenue because it can’t control its appetite for spending. That’s why it wants a tax agency in beast mode.”
The bill looks likely to pass after Senator Kyrsten Sinema (D-AZ) agreed to the package Thursday evening. Sinema was the last Democrat to hold out on the bill due to its carried tax increase provision before an agreement was made Thursday to remove the provision.
“We have agreed to remove the carried interest tax provision, protect advanced manufacturing, and boost our clean energy economy in the Senate’s budget reconciliation legislation,” Sinema said, according to Fox News. “Subject to the Parliamentarian’s review, I’ll move forward.”
Republicans on the Senate Finance Committee also released data last week from the nonpartisan Joint Committee on Taxation (JCT) that showed that taxes will increase in the calendar year 2023 for everyone under the plan except those making between $10,000 and $30,000 per year.
By Tim Meads