(RightWing.org) – In 2022, the Democratic-led Congress enacted the Inflation Reduction Act. As part of the legislation, the IRS is provided $80 billion to hire 87,000 new employees to beef up tax enforcement. The Biden administration swears the unleashed IRS won’t increase tax audits on the poor or middle class. Yet, data shows the tax collection agency is five times more likely to audit those on the lower end of the economic scale than most others.
On January 4, the nonpartisan data gathering and distribution organization, Syracuse University Transactional Records Access Clearinghouse (TRAC), obtained information on who the IRS was auditing through a Freedom of Information Act (FOIA) request and legal action. It found the promises of the Biden administration may be empty.
Data Shows Poor People Are Five Times More Likely to Be Audited
In fiscal year 2022, which ran from October 1, 2021, through September 30, 2022, the report found IRS agents audited a minimal number of millionaire’s tax returns. It stated the IRS had roughly 1,400 staff years of revenue time to review 164 million income tax returns, and approximately one-fourth of those hours were dedicated to auditing wealthy individuals. That resulted in only 1 out of every 100 millionaires getting a notification from the IRS of an audit.
The clearinghouse noted that in recent years, the tax collection agency has relied less and less on face-to-face audits. Instead, it sends automated letters through the mail asking taxpayers to submit additional documentation. In fiscal year 2022, the investigation noted 85% of all audits were through these letters. About half of them, 48%, were mailed to millionaires.
However, around 700,000 people who reported incomes of a million dollars or more in “total positive income” received zero scrutiny from the IRS. It’s a trend that has been occurring over the last several years. Last fiscal year, the odds of a family who reported earnings above $1 million getting contacted by the IRS was barely over 1%.
While the rich are audited less, low-wage earners are still being targeted by the IRS. TRAC’s study revealed that low-income earners were five times more likely to receive a tax audit. This was mainly due to them claiming the earned income tax credit.
The report claims the IRS action wasn’t because poorer Americans account for the under-reporting of their taxes. Instead, it’s because they are easy targets.
Democrats Say Increased IRS Enforcement Is Designed to Go After Tax Cheats
Recently, the White House said the Inflation Reduction Act’s IRS provision would ensure wealthy tax cheats will pay their fair share in taxes to the federal government and make it easier for working people to acquire tax refunds.
In August 2022, under sworn testimony, then-IRS commissioner Charles Rettig told Congress the tax agency wouldn’t increase audits on households earning less than $400,000, a refrain promised by President Joe Biden. Still, Democrats admit the higher audit rates among poorer families happen because the IRS doesn’t have the financial backing of Congress to go after wealthy households who have resources to hire attorneys and accountants.
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