Record IRS revenue—but Biden expands IRS scope/audits

I think this is a good point (and, I suppose by implication, the rest aren't). I hate that we actually have a multi-billion dollar industry built around the filing of taxes. But, the solution to bad tax law is legislative reform, not bad execution. We should simplify, but that's going to be a long and hard process. In the meantime, we should arm our IRS to do as good a job as they can with the current code. That doesn't mean the IRS has to feed any filer who made a mistake to the lions. My impression is that they work with people who make honest mistakes.

When Trump was elected, he said he would simplify the tax code and lower taxes. Then it seemed like he wouldn't be able to deliver on both simultaneously, so he chose to sacrifice simplification to get the tax cuts. I understand the political calculation there. At some point though, I hope we find the political will to actually simplify the tax code.

The aforementioned American Families Plan shows a 10-year plan on page 16 for spending an additional $79 billion. The employee ("FTE") line shows 86,852 FTEs in the last year of the Plan. Per the Plan, these are additional dollars and FTEs ("The IRS proposal includes year-by-year estimates of the additional resources that will be directed toward the agency"), and excludes the existing IRS budget of ~$13 billion/year and 74,000 FTEs. Just looking at this plan, it looks like a glide path to roughly double the size of the IRS (in both headcount and budget) by the end of ten years.

I don't see in this Plan any justification to say the net gain is going to be ~15k FTEs. I know this article in Time was saying that because of attrition the net gain in FTEs was only going to be 20-30k, citing an economist at Treasury. But that doesn't make sense to me the way the Plan is presented. The IRS's base budget likely assumes that attrition in staff would be replaced (unless, was it planning to shrink with attrition?), and this Plan is incremental to their existing budget. So that is 87k additional employees -- or about 160,000 total FTEs.

Not that I have a problem with any of that. So long as an additional $1 in IRS budget yields more than $1 in tax collection, it's in-the-money and we should spend it. But maybe there is something I'm not understanding about this net-gain idea.

 

It's the Tax Preparer lobby's fault for the **** system most Americans have to deal with.

I saw automatic e-file mentioned in a WSJ commentary as a bad or disastrous idea but they didn't mention why.

Being the lazy b*stard that I am, I would rather have Return-Free filing and hire an accountant to shake some extra loose change.

https://thehill.com/homenews/360717...-changing-the-way-americans-file-their-taxes/

 

The IRS has been bleeding due to attrition and tight budget for years, so maybe. The base budget should tell you that but that's not part of the May 2021 proposal (focus only on the $80B proposal). Treasury spokesperson said they expect to lose up to 52k employees over the next 5 years due to attrition. Using that #, 86k hires yield ~+30k net.

American Families Plan: "Audit coverage for large corporations has been cut in half over the last decade. as coverage for companies with $20 billion or more in assets decreased from 98% in FY 2010 to around 50%.32 This is the result of staff attrition and budget stringency, which both diminish the resources that the IRS can dedicate to auditing high-income taxpayers and large corporations."

IRS Will Target 'High-Income' Tax Evaders with New Funding, Contrary to Social Media Posts - FactCheck.org
Over the next five years, the IRS is expecting to lose up to 52,000 employees to attrition, the Treasury Department spokesperson told us in a phone interview. Most of the new hires will replace the outgoing employees and will be on the service side of the IRS.

“The majority of hires made with these resources fill positions of the 50,000 IRS employees who are on the verge of retirement. Of the net new hires, the majority are hired to improve customer services – from upgrading IT to answering phone calls,” the Treasury Department spokesperson said.

The IRS might net about 30,000 new hires, as a result of the number of retirements and new funding. But the IRS hasn’t yet released estimates for how many new employees the agency could hire with funding from the Inflation Reduction Act. The IRS is expected to release the final numbers and breakdown in the coming months.

 

There is a propaganda fight over these 87,000 FTEs, so it'd be really nice to get some clarity from the government on this. Obviously, the scare tactics of the right to intimate there will be 87,000 more agents conducting audits on middle-class Americans is just a dumb distraction to create some FUD. And the assurances of the fact-checkers that it'll only be an expansion of 30,000 in headcount are perhaps soothing but it honestly doesn't make sense to me. Wouldn't be the first time government spokesmen were blowing sunshine up our asses about some change (see "if you like your plan, you can keep your plan"). Sure, they might attrit 50k employees in the next 10 years. But, who would make a supplemental budget that includes attrition from the base budget? As a former FP&A guy, I think that's nonsensical. You'd handle replacements in the base budget. But of course, if anyone is going to do something dumb with the budget, it's the government. It'd be nice to see a consolidated view of the proposed IRS budget over the next 10 years, if anyone has it.

Again, I'm fine with it if it's 160k. I'm fine with it if it's 160k auditors. But it bothers me to see conservatives sling around this 87k and liberals smugly retorting with 30k while Treasury doesn't present anything authoritative aside from the spokesman's word which seems to be at odds with the agency's own report. I'll just say I Don't Know until Treasury does release their final numbers.

I'm fine, in theory, with all kinds of approaches to making taxes easier and slimming down the tax prep industry (conservatives like to point out the dead weight loss of paying taxes, but at least taxes get spent on government services; the real dead weight loss is in operating this giant tax calculation machine). I just want it to be just, preferably progressive, and well-enforced.

 

1. The IRS has around 80K employees now, and half of them could retire today if they chose.

2. These employees will surely retire in the next 5 years.

3. The 87K increase in employees will come in the next 10 years, to offset current employees retiring.

4. The 87K employees aren't all examiners. The IRS has a lot of support staff. There is a reason why it takes forever to get someone on the phone now, to get your paper filed return processed, etc.

Don't fall for the scare tactics.

 

Seriously all the GOP has is "FEAR THIS" ...or "FEAR THAT"....they literally have no policy agenda.

DD

 

IRS illegally leaking tax info of political enemies to Politico

no one will be punished for this of course

 

You have no idea who leaked what.

 

Y’all are focused on Trump accidentally keeping newspapers when he left the White House, while ignoring that Biden is going to send IRS agents to your children’s lemonade stand….

 

Do you bother even reading the stuff you post? If so, did you take a course in reading comprehension? It's mind boggling how many times you post stuff and if you just spent 1 minute reading, you wouldn't comment the way you do. Unless you're a complete and total idiot.