IRS crackdown on wealthy tax cheats nets $1 billion in revenue
The Inflation Reduction Act’s IRS modernization is already yielding results.
President Joe Biden’s Inflation Reduction Act of 2022 included funds to modernize the Internal Revenue Service, including to expand the agency’s resources for cracking down on wealthy individuals making more than $400,000 annually who do not pay what they owe each year in taxes. Already the effort is paying dividends.
The U.S. Department of the Treasury and the Internal Revenue Service announced on July 11 that their efforts to collect past-due revenue from the highest earners have brought in more than $1 billion.
As points of comparison, $1 billion would more than pay for the entire cost of the federal program providing free and low-cost breakfasts and lunches in schools for two weeks.
It would pay for the operation of the entire National Park Service for more than three months.
And it would pay for more than half of the $1.76 billion in bridge repair funding Pennsylvania will receive over five years under Biden’s bipartisan 2021 Infrastructure Investment and Jobs Act.
Pennsylvania Democratic U.S. Sen. Bob Casey voted for the Inflation Reduction Act, as did Democratic U.S. Reps. Brendan Boyle, Matt Cartwright, Madeleine Dean, Dwight Evans, Chrissy Houlahan, Mary Gay Scanlon, and Susan Wild.
But every Republican in Congress, including Reps. Brian Fitzpatrick, John Joyce, Mike Kelly, Dan Meuser, Scott Perry, Guy Reschenthaler, Lloyd Smucker and Glenn Thompson, voted no.
Republicans falsely claimed the law would create an army of armed federal agents to harass working families. “The reconciliation bill coming to the House Floor tomorrow adds $80 billion to the Internal Revenue Service – nearly six times the agency’s current annual budget – and adds 87,000 new IRS enforcement personnel to pursue taxpayers, including the middle class,” tweeted Fitzpatrick in August 2022.
CNN debunked this claim in January 2023, reporting that while a 2021 Treasury Department document noted that the funds could enable 86,952 full-time employees to be hired over a decade, not all of those hired would be agents, and many would replace the 52,000 IRS employees expected to retire by 2028.
The eight representatives voted in January 2023 for a bill to rescind the IRS modernization funding.
A February analysis by the IRS and Treasury Department estimated that the crackdown could net $851 billion by the end of 2034.
