America
IRS Plans New Audit Blitz on Wealthy
It will use funds from Biden administration to target rich Americans and large corporations.
A BY MARISA HERMAN
n internal revenue ser- vice plan to aggressively increase audits is raising fears the agency may tar-
get specifi c economic groups. On May 2, the agency detailed
how it intends to spend the $80 mil- lion boost it received from the Biden administration’s 2022 Inflation Reduction Act. To ostensibly catch tax cheats, the
IRS is infusing a combination of tech- nology and additional specialists to pay closer attention to big companies and high-income taxpayers who may have cut corners. It states the IRS will focus on more
audits for wealthy Americans and large corporations. “The IRS’ strategic operating plan
is incredibly concerning,” said Thom- as Savidge, an economist at the Amer- ican Institute for Economic Research. According to the plan, in tax year
2026, the IRS will double its audit rate for Americans who earn more than $10 million a year. It will triple the audit rate on cor- porations with assets totaling $250 million or more. In 2019, nearly 9% of these cor-
porations were audited. By 2026, the IRS hopes to audit 23%. The plan also calls for more scru-
tiny on “complex partnerships” with assets over $10 million. The IRS expects to increase audit
rates nearly tenfold — from just 0.1% in 2019 to 1% in 2026. “Focusing on specifi c businesses
or people to target for audits under- mines equality under the law and opens the door to the IRS targeting taxpayers for their opinions, beliefs, or ethnicity,” Savidge said. He points out that in 2011, the
IRS was found “targeting Tea Party groups because of their opposition to the Aff ordable Care Act and the Obama administration.” “We are likely to see a repeat of
that under this new IRS plan,” he said.
Last year, Matt Taibbi, an inde-
pendent journalist who broke the “Twitter Files” story, told Newsmax that the IRS visited his house unan- nounced the day he spoke with House Republicans investigating the Biden administration’s weaponization of the government. “It certainly looks politicized,” Taibbi said about the federal agent
who reportedly showed up at his New Jersey property and left a note last March.
Responding to a Wall Street Jour-
nal opinion piece about how the IRS is targeting the “$200,000 man,” Sen. Cynthia Lummis, R-Wyo., criticized the focus on middle-class fi lers. “Who could have seen this com-
ing,” she posted on social media plat- form X. “President Biden is using his army of 87,000 IRS agents to harass hardworking folks across Wyoming who are already struggling to make ends meet because of infl ation.” Rep. Josh Brecheen, R-Okla., also
took issue with the report that 63% of new audits targeted taxpayers with income less than $200,000. “President Biden’s IRS army could
come after you next,” he posted on X. The IRS insists it will not increase
audit rates for small businesses and taxpayers making under $400,000, and has emphasized that the audit rates for those groups remain at “his- torically low levels.” According to the agency’s “Data-
book” report, it closed roughly 583,000 tax return audits in the 2023 fi scal year, uncovering almost $32 bil- lion in recommended additional tax. The IRS isn’t solely relying on technology to help with enforcement. It also has plans to boost its workforce to over 100,000 people in the next three years to achieve its goals. Because income tax is a tax on someone’s ability to produce, Savidge said the “heavier the hand of the gov- ernment, the less likely people are to take risks in business.” “Even if you are doing everything
correctly, that added risk of possibly losing everything because the IRS is going after you has negative eff ects on economic growth in the long run,” he said.
20 NEWSMAX | JUNE 2024
DESIGNER491©ISTOCK
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