As
the late great Ronald Reagan once said, the nine most terrifying words
in the English language are: “I’m from the government, and I’m here to
help.”
He was right.
Yet here we are with inflation at a 41-year high, the worst border
crisis in U.S. history and crime surging across across the country and
what are Democrats focused on?
Flooding the IRS with $80 BILLION in new funding to hire an
additional 87,00 new auditors and agents to go after everyday Americans
and small businesses.
To put that into perspective, that’s roughly double size of the
agency currently and more than the staff of the Pentagon, FBI, Border
Patrol and State Department combined.
Sadly, this wouldn’t be the first time the IRS was weaponized against the American public. Who could forget Lois Lerner?
Lerner of course is the disgraced former high-ranking IRS official
under the Obama administration who oversaw the intentional targeting and
harassment of conservative taxpayers. Her seething disdain for
conservatives, whom she referred to as "crazies" and "a--holes," was
palpable.
The evidence of IRS abuses is overwhelming and points to a chilling
pattern of intimidation and harassment against American citizens. And
now, middle-class families are in the crosshairs.
You can rest assured that I voted NO on this legislation. Read the
below Wall Street Journal editorial and let me know if you agree with my
vote.
Vern
The IRS Is About to Go Beast Mode
The Editorial Board
Progressives want Joe Biden to unleash what they call “beast mode”
executive power, and the Schumer-Manchin tax bill supplies the cash to
turn the Internal Revenue Service into Wolverine.
The pact between Sen. Joe Manchin and Majority Leader Chuck
Schumer includes $80 billion in new funding for the tax man. Democrats
claim this “investment” will yield more than $200 billion in revenue.
That estimate is highly speculative, but if it’s anywhere close to right
IRS auditors will soon be coming after tens of millions of Americans.
The $80 billion is more than six times the current annual IRS budget
of $12.6 billion. The money will be ladled out over nine years and comes
with few strings attached. The main Democratic command is for the tax
agency to bring the hammer down on taxpayers.
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
result will be far more audits, civil suits and criminal referrals.
The main targets will by necessity be the middle- and upper-middle
class because that’s where the money is. The Joint Committee on
Taxation, Congress’s official tax scorekeeper, says that from 78% to 90%
of the money raised from under-reported income would likely come from
those making less than $200,000 a year. Only 4% to 9% would come from
those making more than $500,000.
The IRS knows the super-wealthy employ lawyers and accountants who
make litigation time-consuming and risky. It also knows that Democrats
would howl if the agency pursues fraud in the earned-income tax credit
program, despite what the IRS has estimated are $18 billion in improper
payments each year.
A particular audit target will be “pass throughs” including
Subchapter S businesses that file under the individual tax code.
Democrats failed to raise the top individual tax rate, so unleashing IRS
auditors is Plan B.
Many of these are small businesses that will settle with the IRS
rather than fight and endure years of costly litigation. The IRS won
only $1.7 billion of the $4 billion in disputed taxes and penalties in
cases closed in U.S. tax court in fiscal 2019. But few taxpayers can
afford to fight in court.
Despite all this new money, Americans shouldn’t expect better IRS
service. The agency in the 2022 filing season answered a mere 10% of its
phone calls. The Taxpayer Advocate Service revealed in June that as of
May 31 the IRS was still sitting on 21.3 million unprocessed paper tax
returns, with millions of taxpayers “waiting six months or more to
receive their refunds.” Yet the Schumer-Manchin bill devotes only $3.2
billion for “taxpayer services.”
The bill does, however, provide $15 million to study a bad Elizabeth
Warren idea. An IRS task force will have nine months to deliver a
report on the feasibility of the IRS running its own “free direct efile
tax return system.” America has a voluntary tax system that lets
taxpayers determine their correct amount of tax before the IRS checks
it.
Sen. Warren wants to create what would be a federal H&R
Block that assesses tax liability for taxpayers. Taxpayers would
presumably have to appeal if they disagree, and who knows how long that
would take.
All of this is likely to be made worse by what seems to be the
increasing politicization of the tax agency. Lois Lerner notoriously
targeted conservative nonprofits for special scrutiny in 2013.
ProPublica, the left-leaning website, obtained and published the
confidential tax information of private citizens in 2021—conveniently
when Democrats were debating whether to impose a new wealth tax. The IRS
has promised to investigate the illegal leak but has so far come up
empty.
The new wave of audits will hit taxpayers even as tax revenue as a
share of GDP is back close to its historic norm of 18.5% and may be
going higher as corporate and individual tax revenue soars. Tax receipts
were up 25% in the first nine months of fiscal 2022 after rising 18.3%
in fiscal 2021.
The federal government isn’t starving for
revenue. 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.
