Q&A: Beefing up IRS
Q: What’s your beef with the Biden administration beefing up the IRS?
A: President Biden will fatten up the IRS to the tune of $80 billion thanks to the so-called Inflation Reduction Act that squeaked through Congress on a party-line vote. The administration plans to double the size of the IRS workforce and beef up enforcement to collect more revenue from the American taxpayer. No matter how much money the IRS collects, big spenders in Washington will never have enough revenue to satisfy their spending appetite. You can bet your boots the tax-collecting agency is gearing up to conduct more audits. Contrary to what the president promised, the IRS will hit small business and lower- and middle-income Americans with more audits. While the legislation was being debated, the Congressional Budget Office estimated that an amendment to prevent the IRS from using the new funding to audit taxpayers with taxable incomes below $400,000 would reduce government revenues by $20 billion. So, just as 40-year high inflation is eating up the wages and paychecks of hardworking Americans to pay rent, buy groceries and fill up the gas tank, the Biden administration is beefing up the IRS by nearly six times its current annual budget to help pay for its climate and social spending agenda. Make no mistake. CBO assumes those making under $400,000 also bill be targeted. Adding an additional 87,000 IRS personnel will put more pressure on small business people and their employees in pursuit of more tax dollars.
As former chairman of the tax-writing Senate Finance Committee, I’ve spent decades conducting oversight of the IRS to hold the tax-collecting agency accountable to the taxpaying public. I’ve written a series of bipartisan reforms to put the taxpayer first, including enacting the Taxpayer Bill of Rights in 1988, amending it in 1996, and enacting the Taxpayer First Act in 2019. I also served on the 17-member National Commission on Restructuring the IRS and conducted a one-year audit of the operations and services at the federal tax-collecting agency. We identified key structural shortcomings, from antiquated computer systems to a culture of intimidation versus customer service. Based on the findings of this working group, Sen. Bob Kerrey and I secured bipartisan, landmark reforms that became law in 1998. The IRS Restructuring and Reform Act sought to modernize its business processes and information technology systems and refocus the primary mission of the IRS on taxpayer service.
Q: What are your concerns about boosting the IRS budget by $80 billion?
A: The IRS has a track record of fiscal mismanagement, wasting billions of taxpayer dollars to upgrade its computer systems and always asking for more money to fix what’s not working. Wasteful spending and mismanagement have spoiled my appetite to shovel more money at the IRS. Although taxpayers deserve prompt, convenient services and protection from cyberattacks, Washington’s answer to every problem is to throw more money at it. After sustaining a self-inflicted black eye during the Obama administration for a political targeting scandal, the IRS still hasn’t come clean regarding apparent leaks of protected taxpayer information. The apparent massive data breach or hack undermines the public trust in our institutions of government. On top of that, the IRS continuously underperforms its mission to serve the taxpayer. During the pandemic, its customer service performance plummeted to new lows. The IRS only answered nine percent of customer support calls. After filing their tax returns for 2021, millions of Americans were still waiting for the IRS to process their tax returns for 2020. Earlier this year, I called upon the Biden administration to get the federal bureaucracy back to in-person work. I also cosponsored an amendment during debate on the spending bill that would have prevented the new IRS funding from being used to hire any new IRS employees until after 90% of the IRS workforce was back in the office. Recently, my staff that help Iowans with casework calculated the average number of days to get assistance from a federal agency had doubled to 335 days. My office is working to resolve scores of cases with the IRS on behalf of Iowans. And yet, according to the Treasury Department, the lion’s share of the new funding is for increasing enforcement and compliance. Narrowing the tax gap, the difference between taxes owed and taxes collected, is something all law-abiding taxpayers want. For years, I’ve championed protections for IRS whistleblowers, to empower insiders who know something, to say something. Blowing the whistle on tax cheats is a proven tool to make them pay what they owe. This program has enabled the IRS to collect more than $6 billion from wealthy individuals and businesses caught dodging taxes. What’s more, it yields untold billions more through taxpayer compliance. I also spearheaded another proven tool, the IRS private debt collection program. Signed into law in 2015, the program has collected more than $2 billion in unpaid taxes through fiscal year 2021. This program brings in money without spending more money. The Biden administration ought to be making better use of the private debt collection program rather than spending tens of billions of taxpayer dollars to squeeze taxpayers and small businesses in the hunt for more money.