House GOP adopts Fox News-driven initiative to reduce IRS tax enforcement efforts

Fox’s Misinformation on IRS Funding Under the Inflation Reduction Act

During August 2022, Fox News propagated a false narrative about the Inflation Reduction Act, wrongly claiming that it would lead to the hiring of 87,000 new IRS agents. This misinformation was repeated over 203 times by Fox personalities and guests, even extending into 2024.

Despite the actual facts that the IRA allocated around $80 billion for additional IRS funding, with a focus on enforcing tax laws for Americans earning over $400,000, the false notion of 87,000 new IRS hires was debunked. The 87,000 figure actually originated from a 2021 Treasury Department proposal, predating the IRA, which aimed to address staffing shortages across all positions, not just auditors or agents.

House Appropriations Committee Cuts IRS Enforcement Funding

On June 3, the Republican-led House Appropriations Committee unveiled a bill that slashes IRS enforcement funding by $2 billion, with over 90% of the cuts targeting tax enforcement. This reduction in funding has hindered the IRS’s ability to effectively carry out its expanded enforcement activities, resulting in minimal utilization of the allocated budget through 2023.

Key Republican figures like Rep. Tom Cole and Rep. David Joyce have championed Fox’s misinformation to support their goal of weakening tax enforcement, ultimately benefiting wealthy tax evaders at the expense of tax compliance.

Success of Extra IRS Enforcement Funding Targeting the Wealthy

Secretary Janet Yellen directed the IRS to focus on high-end noncompliance with the additional enforcement funding from the IRA, leading to the successful recovery of over $480 million from millionaire tax evaders by February.

  • Treasury estimates project an additional $561 billion in tax revenue between 2024 and 2034 through enhanced IRS enforcement.
  • If Republican-enforced cuts to enforcement funding are reversed, estimated revenues could reach up to $851 billion over the next decade.
  • In fiscal year 2023, the IRS collected $86 billion through enforcement programs, showcasing a return on investment of approximately $7 to $1.
  • Research indicates that audits of wealthy taxpayers have the potential to deliver $12 in tax revenue for every $1 spent.
  • IRS Commissioner Daniel Werfel warned that for every $100 million taken from the IRS, the deficit could grow by $600 million over 10 years.
  • The Committee for a Responsible Federal Budget highlighted that rescinding IRS funding could result in a loss of $2.50 in revenue for every $1 cut.

Read More of this Story at – 2024-06-07 15:05:21

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