The IRS Has $80 Billion in Funding
Under Joe Biden, the IRS has been able to acquire $80 billion in funding.
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This is from the Inflation Reduction Act (IRA), which became law in 2022 after its resources had been depleted in previous years.
The Promises of the Inflation Reduction Act
Biden signing the IRA into law in 2022 signaled a historic moment for the Democrats and U.S. history.
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It aimed to raise $124 billion in IRS tax enforcement, invest in energy security and climate change and extend the Affordable Care Act, totaling over $300 billion in deficit reduction.
The IRA Money Has Helped the IRS Collect $520 Million
The funding given to the IRS under the IRA has helped it build up its customer service operations, including answering more calls to taxpayers.
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The IRS has also increased its tax enforcement efforts and collected $520 million in unpaid taxes from wealthy taxpayers.
The Number of IRS Agents Had Dwindled
The number of IRS agents decreased from over 110,000 in 1994 to over 82,000 in 2023.
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However, the 2023 numbers were up slightly after numbers had reached an all-time low between 2018 and 2019 of just over 73,000.
Republicans and the 87,000 IRS Agents Lie
Back in 2022, Republican politicians began spreading a lie that the IRS was going to use the IRA money to hire 87,000 IRS agents specifically to audit Walmart shoppers.
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Republicans did this to try and get voters on their side, especially with the mid-term elections happening around the time the $80 billion in funding for the IRS was announced.
The IRS Is Targeting Certain Groups
With the $80 million in funding, the IRS is planning on targeting certain groups by raising the amount of tax they pay.
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They are mostly focusing on high-income individuals and businesses, while low- and middle-income earners won’t be affected.
Individuals Earning Over $10 Million
One group the IRS is planning on targeting is individuals who earn over $10 million.
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In 2019, those earning over $10 million paid 11% in tax. However, this is expected to increase by 50% to 16.5% in 2026.
Corporations With $250 Million in Assets
Another group the IRS will be targeting with its higher tax audits is corporations that have at least $250 million in assets.
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In 2019, this group was paying 8.8% on tax. However, in 2026, this is set to be tripled to 22.6%.
Complex Partnerships With $10 Million in Assets
The final group is complex partnerships with assets of at least $10 million, which the IRS is set to target.
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This group paid just 0.1% in tax in 2019. It is now set to increase to 1% in the 2026 tax year.
Those Earning Under $400,000 Won’t Be Audited
While the IRS is targeting high earners, those who are earning under $400,000 each tax year need not worry.
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IRS Commissioner Danny Werfel has assured these taxpayers that their tax rates will remain at historically low levels for the foreseeable future.
The IRS Is Going After Unfiled Tax Returns
In addition to raising the taxes of wealthy taxpayers, the IRS is also going after those with unfiled tax returns.
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The IRS has already sent out 125,000 notices and has estimated it will receive millions in unpaid taxes. However, it is currently too early to tell exactly how much this amount will be.