Eighty-seven thousand new IRS agents!
What could possibly go wrong?
In a bill passed and signed last August, “$80 billion worth of new funding over the next decade” was shoveled at the Internal Revenue Service “so it could” — as a recent Reason article summarizes — “hire 87,000 new workers, purportedly to better target millionaire and billionaire scofflaws.”
The assurance that the new investment in personnel would not be directed towards “those making under $400,000 annually” was, as Reason’s Liz Wolfe makes clear, “not provided within the text of the actual bill.”
Ah — political promise over actual law and all bureaucratic experience. The IRS, you see, prefers to focus its audits on the lowest income earners, who were audited more often than millionaires.
Why? Well, the key is one feature of the tax code: the earned income credit. Which, it just so happens, is easy to get wrong. And upon which lower-income workers have come to rely.
The other reason is even more basic: “given a dearth of experienced auditors not likely to be fixed soon, the agency would rely on the easiest and least time-consuming types of audits.” Which are conducted through the mail. Easy. Cheap. And annoying.
Even with more IRS auditors with more experience, this path of least resistance — these earned income credit audits — will likely get the most use.
The reasons behind the reasons? Why were Democrats so eager to increase the ranks of tax collectors? Sure, Democrats love taxes. But like most tax hikers, they promote the idea that others will pay all those taxes; they promise to stick it to the rich . . . while ever-so consistently missing the mark and whacking the poor and middle classes.
This is Common Sense. I’m Paul Jacob.
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5 replies on “Voting for Audits”
The alleged fact-checkers on Facebook insisted that the new audits would target only those making more than $400,000, and I was prevented from posting a joke built on the idea that a more general population would be subjected to more audits.
Republicans are unlikely to work to reduce the number of auditors and unlikely to work to redirect the auditors towards more affluent voters.
And Democrats can, in future, promise to work to help the new victims, without admitting that Democrats had themselves enabled the victimization. This pretense will be protected by those at the commanding heights of our culture, and no one should expect that anything beyond token relief will be provided.
More federal workers. More Democrat voters. It’s as simple as that.
Federal government growth continues apace.
Preparers must be vigilant when preparing EITC returns.
“Law
Section 6695(g) of the Internal Revenue Code states:
Any person who is a tax return preparer with respect to any return or claim for refund who fails to comply with due diligence requirements imposed by the Secretary by regulations with respect to determining (1) eligibility to file as head of household (as defined in section 2(b)) on the return, or (2) eligibility for, or the amount of, the credit allowable by section 24 [CTC/ACTC/ODC], 25A(a)(1) [AOTC] or 32 [EITC] shall pay a penalty of $500 for each such failure.
The amount of the penalty is adjusted for inflation. For returns filed in 2022, the penalty is $545 per failure per return.”
“When asked why he robbed banks, Sutton simply replied, “Because that’s where the money is.” On February 15, 1933, Sutton and a confederate attempted to rob the Corn Exchange Bank and Trust Company in Philadelphia, Pennsylvania. Sutton, disguised as a mailman, entered the bank early in the morning.”
That is why there is fraud on EITC tax returns. Most filers will not have the expertise required to fill out a return wits an EITC claim. They most likely will use a paid preparer. Paid preparers view EITC returns as red flags because of the penalties.
Most of the fraud is probably by individuals trying to defraud the tax system.
EITC is where the money is!
Pam,
“On February 15, 1933, Sutton and a confederate attempted to rob the Corn Exchange Bank and Trust Company in Philadelphia, Pennsylvania. Sutton, disguised as a mailman, entered the bank early in the morning.”
You really shouldn’t pad your comments with such passages.
“Most of the fraud is probably by individuals trying to defraud the tax system.”
True, but silly. All of the fraud is fraud. But how much of the alleged fraud is fraud?
People with lower incomes can least afford to pay for genuine expertise in tax-preparation and can least afford to forgo any legal method of reducing their tax burdens. Making them dependent upon the EITC and making it difficult to handle correctly and focussing the attention of tax agents upon it is not merely perverse but willfully so.