The IRS released its plan on Thursday for spending the $80 billion in new funding provided by the Democratic Inflation Reduction Act, emphasizing that it won’t be used to drive up audits on the middle class.
The 150-page Internal Revenue Service plan was released with the blessing of new Commissioner Danny Werfel. The report seeks to respond to Republican accusations that the agency will become supercharged and use its power to target non-rich families. It also highlighted the agency’s plans to streamline customer service and help people properly file their taxes and avoid the auditing process.
Republicans argue that 87,000 more IRS workers is far too high a number, although Democrats have countered the GOP by noting that the tens of thousands of new employees will not all be auditors and will include thousands of workers in other roles. A large number of current IRS workers are also expected to retire in the coming years, partially offsetting the number of those being hired.
Republicans are contesting that characterization, though. During testimony before Congress, Yellen was asked about whether her directive to not increase audits on those earning $400,000 or less referred to the total number of IRS audits or a proportionate share based on past years. She said it was the latter.The IRS said that taxpayers earning $1 million or more annually were subject to an audit rate of just 0.7% in 2019, a precipitous drop from 7.2% in 2011.
“Since 2010, enforcement personnel has declined 30%, while the economy grew by more than 30% and filing grew by 14%. This means our work on resource-intense areas, particularly wealthy individuals, large corporations, and big partnerships suffered,” Werfel said.
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