Democrats sic the IRS on taxpayers | EDITORIAL


The IRS has a backlog of 10 million unprocessed tax returns for the 2021 pay year. That means many Americans who filed their taxes on time four months ago — or more — have yet to receive reimbursement for overpaying to the federal government. This has caused a very real burden on taxpayers with tight budgets.

“The IRS does not hesitate to penalize and fine taxpayers for late filings and payments,” Sen. Ron Johnson, R-Wis., wrote to the agency this month, “yet he does not hold himself accountable when he does not treat the taxpayers”. returns in due time.

At the same time, Democrats in Congress have an outdated idea of ​​how to cut the federal deficit — and, unsurprisingly, that doesn’t involve fiscal restraint. Instead, they seek to increase IRS spending, sending the agency into “beast mode” to hunt down tax cheats. The comically misnamed Cut Inflation Act includes $80 billion for tax collectors, an “investment” that proponents say will yield $200 billion.

This is a massive increase in funding for the IRS, which currently has an annual budget of $12.6 billion, reports The Wall Street Journal. The $80 billion will be spread over nine years and includes $45.6 billion for “enforcement,” including litigation, criminal investigations, investigative technology, digital asset monitoring, and “a new fleet of tax collection cars,” according to the Journal. The IRS, which now has 79,000 employees, will add 87,000 employees over the next six years, a significant increase even with retirements and other staff losses.

Democrats insist that none of this will trickle down to the middle class. Treasury Secretary Janet Yellen wrote in a letter to the IRS Commissioner that “contrary to misinformation from opponents of this legislation, small businesses or households earning $400,000 a year or less will not see a increased chances of being audited”.

Yet, as Reason magazine’s Liz Wolfe pointed out, Senate Democrats rejected a GOP amendment to the legislation specifically stating that the IRS must not use its new resources to prey on taxpayers of more modest means. . Indeed, the new law includes virtually no accountability provision for what the agency does with its massive increase.

“Enhanced IRS enforcement is often touted as a way to crack down on gross tax cheats and bail out the coffers of the federal government,” notes Ms. Wolfe, “when in reality it allows a government agency invasion of privacy from harassing the working rich, finding very little extra income in the process.There’s no reason to think this time will be any different.

Additionally, 2019 Treasury Department figures show that while the top 1% account for 28% ($163 billion) of the $600 billion “tax gap” — the difference between taxes owed and collected – the bottom 90% of employees account for 35.5% of the shortfall, or $213 billion. In other words, there’s a lot of money to be made by firing middle-class IRS agents — and the agency knows it.

This should be of particular concern in a hospitality-centric region like Southern Nevada, where tip employees dominate. Democrats argue that those who pay their taxes have nothing to fear. But it is fiction. Standing up to an aggressive tax collector can be a costly, stressful, and daunting process, even for those who have done nothing wrong. Stories of abuse against innocent taxpayers are legion, especially when it comes to amorphous “structuring” laws or laws involving civil forfeiture.

The Democrats have just unleashed an army of tax collectors on the American public. In the meantime, the IRS is unable to ensure that taxpayers receive refunds that are legally owed to them within a reasonable time. Voters should pay close attention to the progressive priorities at work here.


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