Not going after middle-income Americans: IRS chief

Skepticism is rife about an Internal Revenue Service (IRS) assurance that it will “absolutely not” use $80 billion in new funding to increase audits of low- and middle-income Americans.

In a recent letter to the US Senate, IRS Commissioner Charles Rettig said the tax collecting agency will use the $45.6 billion “enforcement-related funds” mentioned in the Inflation Reduction Act to hire 87,000 new agents.

The bill, which was cleared by the Senate earlier this week, is set to pass in the Democrat-controlled House on Friday.

Targeting the rich
“The resources in the reconciliation package will get us back to historical norms in areas of challenge for the agency—large corporate and global high-net-worth taxpayers,” Rettig wrote.

“These resources are absolutely not about increasing audit scrutiny on small businesses or middle-income Americans,” he added.

President Joe Biden and his Democratic Party have insisted that Americans who earn less than $400,000 a year will not have to pay a cent more in taxes.

Pinch of salt
But skeptics aren’t buying any of these assurances.

Between 78% and 90% of the estimated $200 billion that the IRS will collect from its bolstered workforce will come from small businesses, the Joint Committee on Taxation said, adding that only 4% to 9% of the amount will come from businesses that earn above $500,000 annually.

“We’ve seen this play out before… the IRS says, ‘We’re going after the rich,’ but when you’re trying to raise that much money, the rich can only get you so far,” Joe Hinchman of the National Taxpayers Union Foundation said.