AMAC Exclusive – By Tom Campbell
The workforce of America’s most reviled federal agency is about to double in size. On Friday, the House of Representatives returned briefly from its August recess to pass the Senate’s massive tax-and-spend budget package. Included with the hundreds of billions of dollars of new spending is $80 billion for the IRS to hire 87,000 new agents to go after American taxpayers.
On August 7, after an all-night “vote-a-rama,” Senate Democrats rammed through the bill, misleadingly titled the “Inflation Reduction Act” (IRA), on a party-line vote using the reconciliation process that bypasses the normal 60-vote threshold. This was after Majority Leader Chuck Schumer reached an agreement with West Virginia Democrat Senator Joe Manchin, who was integral in tanking the $2.2 trillion budget package passed by the House last November. At the time, Manchin objected to more spending and tax increases on Americans during a period of high inflation, a position that clearly changed given his green-lighting of a supercharged IRS this time around.
The money allocated to the IRS will increase the agency’s budget by 600 percent, making it one of the largest federal agencies. The surge in the workforce will make it larger than the Pentagon, the State Department, the FBI, and Customs and Border Protection combined.
While congressional Democrats argue that the huge increase in the agency’s size is needed to go after billionaire tax cheats, it comes as the federal government is projected to collect an all-time high $5.04 trillion in taxes in fiscal year 2022. The government is on track to hit this record without the additional IRS agents. Moreover, there are some 735 billionaires in the U.S. – making Democrats’ claim that they need 87,000 new IRS employees to deal with them even more outrageous.
But Democrats know full well the additional IRS agents will not be focused solely on scrutinizing wealthy individuals and businesses. The IRA authorizes roughly $430 billion in new spending, which requires new funding mechanisms. Of the $80 billion allocated to the IRS, $46 billion, or nearly 60 percent, is for “enforcement” purposes. While Senate Democrats have said increased audits are not “intended” to increase the tax burden on Americans making less than $400,000 per year, Senate Republicans have countered that agents will necessarily have to turn to middle- and working-class Americans to raise the $200 billion required by the bill. In fact, the Joint Committee on Taxation has said 78 to 90 percent of the revenue raised by ramping up audits will come from those making less than $200,000.
During the debate on the IRA, Senate Democrats further showed that they are not serious about their claim that low- and middle-income earners would not pay more in taxes. Republican Senator Mike Crapo of Idaho offered an amendment that would have prohibited any of the $80 billion for the IRS from being used to audit individuals or small businesses with taxable incomes below $400,000. The amendment failed on a party-line vote, with every Senate Democrat voting against.
No doubt the supersizing of the IRS will not just target the “rich” as congressional Democrats promise. The IRS will not be going so much after the millionaires and billionaires, who can hire accountants and lawyers to fight off audits, as they will low- and middle-income earners, who will be the easier targets because they do not have those same resources.
Equally concerning is that Americans do not have to go too far back in their memories to recall abuses by the IRS. In 2013, the agency admitted to targeting conservative organizations applying for tax-exempt status during the 2012 election, subjecting them to heightened scrutiny and delays. And in 2021, as Democrats were debating a new wealth tax, confidential tax information of private citizens was leaked from the IRS to the left-leaning outlet ProPublica.
It is difficult to imagine how doubling the size of the IRS would not lead to an even greater potential for abuse this time around – particularly with such a massive influx of funding for new bureaucrats who are overwhelmingly liberal. With an army of new agents, the IRS will have heightened ability to increase audits exponentially. The threat of those audits potentially targeting individuals, businesses, and organizations whose politics and policy positions are not aligned with the administration in power cannot be discounted.
As they continue to face the pain of inflation due to the policies of the Biden Administration, working Americans now have to worry about tens of thousands of additional IRS agents looking to squeeze tens of billions of dollars out of them to fund the federal government’s spending binge.
Tom Campbell is the pen name of a Washington, D.C.-based professional with more than a decade of policy and legislative experience at the state and federal levels of government.