The IRS deserved help. Tax cheats and their GOP patrons think otherwise | Editorial

Published: Aug. 31, 2022

The conspiracy theories shoveled by some on the political right are increasingly baroque, but they believe they’ve found a winner with this one: Americans should be on the lookout for armed IRS thugs crashing through your door and climbing through your window.

Call it the Big Lie of ‘22 -- one that ranks up there with stolen elections and death panels – and whether Republicans have the ability to stoke the desired panic is irrelevant, because this is the whole truth: The IRS needs a funding boost more than any other bureaucracy in the federal government, because there’s more than a half-trillion in unpaid taxes that need to be collected, even if it is stashed away by the kind of people who donate to campaigns.

The historic Inflation Reduction Act includes $80 billion in increased IRS funding over ten years. The goal is to enhance tax compliance, which the Congressional Budget Office says will bring in an estimated $203 billion in revenue. The funding covers more personnel, enhanced IT, and taxpayer services, and those who question the need for all that just aren’t paying attention.

The IRS is comically understaffed. It has a workforce of 79,000 employees, which is down from 117,000 in 1992. Last year, it processed more than 260 million tax returns – which is a 30% increase from 1992.

Technically, the agency is stuck in 1972. Its computers use a 50-year-old programming language called COBOL (think blinking green cursor), though a few have been upgraded to Windows XP, which dates back to 2001.

And the IRS is drowning in an ocean of unprocessed returns – the backlog is at 10.2 million as of July – because it lacks the ability to scan paper tax returns into the system, so they must be inputted manually by keystroke.

Little wonder. IRS funding has fallen 20% since 2010, according to Commissioner Charles Rettig, and its enforcement staff has fallen by 30% over the same period. That has led to a sharp drop in audits, particularly for the wealthiest taxpayers: In the mid-2010s, 30% of the top earners ($10 million annually) were typically audited. Today, it’s less than 10%.

That means tax dodging is easier than ever -- mostly through sophisticated evasion tactics, such as offshore tax shelters and pass-through businesses – and often protected by elite lawyers who know how to stonewall investigations.

So, money for greater enforcement explains the Republican freakout.

Sen. Ted Cruz warns that the Biden Administration is funding “a shadow army of 87,000 IRS agents.” A Fox Newser predicts that IRS agents would “hunt down and kill middle class taxpayers that don’t pay enough.” RNC chair Ronna McDaniel foresees the Democrats sending “the IRS SWAT team after your kids’ lemonade stand.”

Sen. Rick Scott (R-Fla.), best known as the biggest Medicare fraudster in American history, sent a letter to constituents, warning them not to apply for a position with the IRS because Republicans plan to defund the agency if they gain control of Congress.

And Politico has an audiotape of GOP big shots being advised by billionaire donor Steve Wynn to run ads that say, “Tell them the IRS is coming after you if you’re a waiter, if you’re a bartender, if you’re anybody with a cash business.”

For the record, the Treasury Department reports roughly $600 billion in unpaid taxes in the US, and it breaks down like this:

♦ The lowest 20% of all earners owe less than $6 billion.

♦ The top 5% of earners owe $307 billion.

♦ And the top 1% of all earners owe $163 billion. Annually.

So it’s clear which group will get the agency’s attention. Rettig, a Donald Trump appointee, told Congress that “These resources are absolutely not about increasing audit scrutiny on small businesses or middle-income Americans,” and that IRS enforcement will focus mostly on those who make over $400,000.

But the agency needs manpower to do it, so they will hire 87,000 employees (only 1% carry guns) to compensate for attrition and the 50,000 that will retire in the next few years.

And each one, no doubt, will be vilified by zone-flooding political liars who slander government employees and excuse sedition.

It’s true that the IRS may never be loved, because it combines two things that we all loathe: handing over our money, and math. But you can’t run the country without it functioning properly.

It’s a simple system, really: Anyone who pays their fair share has nothing to worry about, and we salute their patriotism, because they’re helping build our parks and schools and rail tunnels.

And anyone who hides their assets and cheats on their taxes is probably very worried. Good.

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published this page in News and Politics 2022-09-01 02:40:28 -0700