Americans were shocked to learn that tucked inside the so-called Inflation Reduction Act was a provision that authorized the agency to hire 87,000 new agents. They were even more disturbed to discover that 90% of the audits authorized by the bill are poised to target small businesses and families making less than $400,000 a year — a fact that even Treasury Secretary Janet Yellen wouldn’t deny when pressed.
However, even the IRA’s infusion of billions of dollars into our government’s most intrusive and powerful agency apparently isn’t enough. If the IRS has its way, tens of thousands of more IRS employees will soon come on the government payroll, expanding the agency into the tax preparation and filing business.
The U.S. tax system has operated on the principle that citizens report their earnings, the government provides some oversight, and the taxes are paid. However, in recent years, progressives like Sen. Elizabeth Warren (D-Mass), Sen. Bernie Sanders (I-Vt.), and Rep. Alexandria Ocasio-Cortez (D-N.Y.) have pushed for the IRS to set up a turnkey operation to file our taxes for us. They successfully wedged a provision into the Inflation Reduction Act instructing the IRS to have an independent third-party study the issue.
Just weeks ago, after the IRS received a favorable study back from New America, a think tank run by Obama administration refugees, it announced a pilot program to start the process. The pilot program will have the IRS prepare taxes for Americans making less than $125,000 a year in the 2024 tax season. As President Reagan said, “the nine most terrifying words in the English language are, “I’m from the government and I’m here to help.”
However, to many unsuspecting taxpayers unfearful of being hounded by the IRS, this idea could have a lot of curb appeal. Who wouldn’t like the entire tax filing process reduced to two or three free clicks on a computer? What could go wrong with trusting your friendly IRS agent to determine how much money you owe the government?
Accountants and tax preparation software companies benefit from finding the most deductions and credits American families can claim in a given tax year. I have a hard time believing the IRS — the nation’s tax collector — will be maximizing anything but their revenue collection.
Is the IRS conducting this pilot program with those making under $125,000 a year because it’s seeking to help them or because it is looking to target them? That’s a fair question since the IRS already devotes most of its revenue collection efforts on the less well-to-do.
A heat map developed and curated by ProPublica of where audits are conducted most often in the U.S. found that the poorest parts of the country receive significantly more IRS scrutiny. It revealed that the IRS’ heaviest audit activity takes place in Humphreys, Missouri, one of the poorest parts of the country — while Loudoun County, Virginia, which boasts the highest median income in the country, is audited at a rate 49-percent lower.
A Syracuse University’s Transactional Records Access Clearinghouse report corroborated ProPublica’s findings. The university carefully examined IRS data and found that low-income households with less than $25,000 in annual earnings are five times more likely to be audited by the agency than the rest of the country. It looks like the IRS disagrees with President Biden, who frequently points at the rich as the income group that’s not paying its fair share of taxes.
Even if the IRS’ motives are pure, it won’t have enough information to bill the American people accurately. Throughout a year, various events in a taxpayer’s life impact the amount they owe. The IRS remains unaware of significant factors, such as home purchases, family caregiving, charitable donations, marriage, children, and more, that reduce an individual or family’s amount owed. The information the IRS does possess, which primarily concerns taxpayers’ income, tends to increase their tax bills. That’s precisely why a report released by England, which operates a similar government-run system, found that the country needs to involve taxpayers more in the process — because they “improve the accurate flow of information throughout the fiscal year.” IRS’ Direct File, by contrast, will cut taxpayers out of that process, and tens of thousands of Americans may be deprived of entitled refunds as a result.
Our friends on the left insist that their 87,000 new IRS agents are going to target the wealthy. We know now that their plan all along was to not just target middle-income taxpayers but also middle-income private-sector tax preparation firms by replacing them with a wave of unionized IRS workers .
Why would Democrats target middle- and lower-income Americans with audits and job losses? For the same reason they do everything: more tax revenue to redistribute and more unionized public employees to support their campaigns. This is about increasing the power of progressives in Washington — 10 even-scarier words.
Santorum is a former senator from Pennsylvania who served on the Senate Finance Committee.
The views and opinions expressed in this commentary are those of the author and do not reflect the official position of the Daily Caller.