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You can tax the rich all you want. The hard part is getting them all to check out. To that end, the Internal Revenue Service plans to hire thousands of new auditors.
The clever tax evader
The U.S. Treasury Department released a report in 2021 that indicated that more than $160 billion is lost each year due to taxes that the top 1% of U.S. earners do not want to pay. This widens the tax gap – the amount of taxes owed compared to the amount collected – which amounts to around $600 billion per year.
To close that gap, President Joe Biden signed the Inflation Reduction Act into law last year, which will pump about $80 billion into the agency and allow it to hire 20,000 people over the next two years:
- The IRS is looking for 3,700 CPAs to work in 250 locations across the country. Each examiner would receive a salary of approximately $125,000.
- In a statement earlier this month, the IRS said it would “intensify work on taxpayers with positive aggregate income of more than $1 million who have more than $250,000 in qualified tax liabilities.” The agency also said exam fees will not increase for people making less than $400,000 a year.
Murk and Mire: The IRS budget has regularly been a point of contention between Democrats and Republicans, with the former arguing that more staff and better computer systems – some of which date back to the 1960s – would help hold the super-rich accountable, while the latter saw it as such you simply fill the DC sump. Earlier this year, the Republican-controlled House of Representatives tried to block $80 billion in IRS spending, but the Senate failed to pass it.
Forbes Steve Forbes, the magazine’s editor-in-chief, believes the ultra-wealthy – backed by teams of accountants and lawyers ready to take on the IRS – are only further emboldened by their tax evasion. In return, he says, the office will target small business owners and upper-middle class Americans who don’t have the same legal and financial resources as the top 1%. And who said millionaires don’t care about us average people?
Source : www.thedailyupside.com