An April report from ProPublica revealed that the Internal Revenue Service audits the working poor at about the same rate as the top 1% of taxpayers. When questioned about the practice, IRS commissioner Charles Rettig conceded that it’s more cost-effective for the agency’s lower-level staff to do mail-in audits on people who claim the Earned Income Tax Credit. Auditing wealthy taxpayers, Rettig said, requires more resources and skilled employees the agency simply doesn’t have. Additionally, Rettig blamed the practice on nearly a decade of congressional cuts to the IRS budget.
“Congress must fund and the IRS must hire and train appropriate numbers of [auditors] to have appropriately balanced coverage across all income levels,” the report said.
Republicans targeted the EITC in 2017, claiming it was being abused. Their proposal of “mini-audits” for anyone claiming the credit intentionally targeted the poor, which is no surprise.
The House Budget Committee has already passed the proposal that would require the IRS to verify the income information submitted by the taxpayer before the tax credit was issued. All the taxpayers. At the very least, this would cause a huge delay in the dispersal of the credits.
Republicans, of course, have long insisted that poor Americans are cheaters, and not just on their tax returns. The wealthy folks, or businesses? Not so much. Right.
The IRS oversees one of the government’s largest anti-poverty programs, the earned income tax credit, which provides cash to the working poor. Under continued pressure from Republicans, the IRS has long made a priority of auditing people who receive that money, and as the IRS has shrunk, those audits have consumed even more resources, accounting for 36 percent of audits last year. The credit’s recipients — whose annual income is typically less than $20,000 — are now examined at rates similar to those who make $500,000 to $1 million a year. Only people with incomes above $1 million are examined much more frequently.
When Republicans grudgingly agreed to increase IRS funding in 2015, no enforcement funds were allocated; since then, the agency has continued to be gutted.
In 2015, when the IRS ability to answer taxpayer phone calls hit a low point, the budget discussions on Capitol Hill took a turn. Republicans agreed to boost the agency’s funding — but only part of it. The “taxpayer services” portion, which goes toward hiring seasonal employees to answer the phones, got bumped up. The “enforcement” portion of the budget continued to be pared: Today, adjusting for inflation, it’s $1.5 billion lower than it was in 2010, a decrease of 23 percent.
This is just the latest reminder that the GOP’s war on the poor comes in many forms. In this case, Republicans will likely have no interest in restoring this funding, as they approve of the current trend. Auditing more poor folks is what the GOP wants. It means less wealthy folks and businesses are audited ... and that’s exactly who the GOP serves.