For too long, the wealthy have used and abused our tax code to avoid paying their fair share, and the government has allowed them to get away with it. So when Congress and President Joe Biden passed the Inflation Reduction Act in August 2022, it gave the IRS desperately needed resources to go after wealthy tax cheats.
Due to a decades-long defunding of the IRS fueled by Republican attacks, the agency could longer do its job going after rich folks who don’t play by the rules. For example, only 2% of millionaires' tax returns were audited last year. This funding is already under attack, so the IRS needs to show some results now to defend our gains—before it's too late.
Sign the petition to the IRS: Use your new enforcement resources to go after wealthy tax cheats.
As recently as 2015, nearly 30% of all IRS audits were conducted on the richest 1%. By 2019, that number had plummeted to less than 10%. Meanwhile, the IRS spends a disproportionate amount of its enforcement capacity going after low-wage earners.
And when senators called them out on this discrepancy a few years ago, the IRS admitted that's because their funding just didn't allow them to go after rich tax cheats:
On the one hand, the IRS said, auditing poor taxpayers is a lot easier: The agency uses relatively low-level employees to audit returns for low-income taxpayers who claim the earned income tax credit. The audits — of which there were about 380,000 last year, accounting for 39% of the total the IRS conducted — are done by mail and don’t take too much staff time, either. They are “the most efficient use of available IRS examination resources,” Rettig’s report says.
On the other hand, auditing the rich is hard. It takes senior auditors hours upon hours to complete an exam. What’s more, the letter says, “the rate of attrition is significantly higher among these more experienced examiners.” As a result, the budget cuts have hit this part of the IRS particularly hard.
Republican politicians defunded the IRS, so the IRS goes after easier targets (i.e., the less wealthy). Republicans then complain that the IRS is unfairly going after the less wealthy.
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So what about more resources for the IRS to do its job? That's what sparked Sens. Ted Cruz and Chuck Grassley’s fearmongering about armed IRS agents coming to your home—a shameless ploy to continue to protect the wealthiest Americans.
Now, with billions of dollars in new funds, the IRS will update its decades-old computer system and improve its customer service. And it will finally have the resources to go after millionaires and billionaires who cost us an estimated $600 billion a year in unpaid taxes.
But the IRS does not have much time to show results. The new Republican House already voted to repeal this funding, while right-wing politicos repeat discredited lies about what the new legislation does. If we are going to secure these changes and make them permanent, the IRS needs to prove that wealthy tax cheats are being held accountable.
Sign the petition to the IRS: Use your new enforcement resources to go after wealthy tax cheats.