BERNARD COLUMN: Major Disaster Declaration?
Published 9:30 am Saturday, January 28, 2023
By Jack Bernard
Bernard is a retired corporate executive
“Biden weaponized the Internal Revenue Service (IRS) by funding the hiring of 87,000 new agents to harass and audit thousands of American families”- Rep Drew Ferguson, 1-17-23, regarding the IRA
In a recent letter to constituents entitled “Major Disaster Declaration” Ferguson accurately discussed the weather we have been having. Congratulations for getting it right, Rep. Ferguson. But then, consistent with the rest of the House GOP leadership, he just could not pass up an opportunity to take yet another cheap shot at President Biden’s and the Inflation Reduction Act (IRA).
The first order of business for the US House should be to approve raising the debt ceiling to pay off debts we have already incurred. However, the GOP did not prioritize introducing a vitally needed debt ceiling bill, so our federal government does not go bankrupt ruining the US economy. The GOP House leadership (which includes Ferguson) has instead introduced a heavily politicized, dead-end piece of legislation (H.R. 23) which deletes the funding for clearly needed IRS staff. Ferguson claims, incorrectly I would add, that these staff members will burden “middle and low-income Americans” via “unjustified audits.”
First of all, according to experts, the IRS is currently severely understaffed. Per the Treasury Department, “since 2010, the estimated number of high-income non-filershas risen by nearly 50% as a resource-constrained IRS lacked the ability to pursue all of these cases.”
On a practical level, have you ever tried to contact the IRS? It’s a very frustrating experience.The IRS is way behind on responding to taxpayer questions or offering assistance when requested, as even the GOP knows. Per Rep. Claudia Tenney (R-N.Y.) – “I work every day with people who still haven’t received their tax returns.”
And the agency has not been authorized to immediately hire new 87,000 agents. Many of the people that they are hiring are simply support staff, not agents. And hiring is over a 10-year period.
Plus, due to retirements, the IRS has lost 50,000 agents in the last 5 years and will lose 50% more due top retirements over the next 5 years. And between 2010 and 2018, it experienced budget cuts amounting to a 30% reduction in enforcement agents causing audits for the super wealthy (over $10 million in annual income) to fall from 18.4% to just a meager 6.7%. While big corporations went from almost universal audits (98%) to less than half (49%).
Treasury indicates that there will be no increase in audits for folks making under $400,000. The stated emphasis for these agents will be on zeroing in on wealthy tax cheats, including corporations. People like the CFO at the Trump Organization, who has been jailed for illegal tax evasion. And looking at the returns of billionaires like Donald Trump who pay no taxes at all in many years. No wonder the GOP is upset.
Being upset is one thing, but some GOP House members are just of control. Per Rep. Marjorie Taylor Greene of Georgia- “It’s going to hire 87,000 new IRS agents and it’s going to arm… 70,000 of these IRS agents.” That statement is just plain wrong, as is much of what Greene says. The only IRS agents that are armed work in the small criminal investigation’s unit.
But the right-wing fake news media is also banging the drum. Per Brian Kilmead of Fox- “Joe Biden’s new army” could “hunt down and kill middle-class taxpayers that don’t pay enough.”
And “90% of the revenue generated from the new IRS agents will come from people making less than $200,000,” per Senator Tim Scott of SC in a Fox interview. Both statements are completely incorrect but feed the Fox narrative.
As for the cost/benefit analysis, it is clear that increasing the IRS staffing will benefit the ordinary American taxpayer. Our nation has dramatically increased the national debt due to the pandemic and the Trump/GOP 2017 law resulting in a drastic reduction of taxes paid by the rich and corporations. But adding these agents will result in $200 billion in increased revenue over 10 years, far exceeding the cost of adding staff.
In a recent letter to Congress, the IRS commissioner stated-“These resources are absolutely not about increasing audit scrutiny on small businesses or middle-income Americans.”
The one reassuring fact coming out of all this is that per a recent poll, three -fourths of Americans have not bought into the GOP/Fox News false assertions.
Taxpayers are not worried about the IRS increasing audits of their returns.