The Internal Revenue Service’s new commissioner, Danny Werfel, released on Thursday the agency’s highly anticipated plan for spending $80 billion in funding over the next decade – and attempted to reassure average taxpayers they don’t need to worry about an increase in audits.
The funding comes from Democrats’ sweeping Inflation Reduction Act, which passed along party lines last year and is meant to support the agency in cracking down on tax cheats and providing better service to taxpayers.
As a result of the improvements, the IRS is expected to collect more than $100 billion in new revenue over a 10-year period.
But Republicans have been critical of sending so much money to the IRS and skeptical that the investment won’t lead to increased audits of hardworking Americans. In the GOP-controlled House, a bill passed earlier this year that would rescind most of the new funding – though it has no chance of becoming law.
Biden administration officials have repeatedly said that taxpayers earning less than $400,000 a year won’t face an increase in taxes due to the new funding, though there is some uncertainty about how exactly the IRS can ensure this.
Werfel addressed the issue on a call with reporters Thursday. The focus of new audits, he said, will first be on wealthy individuals, large corporations and complex partnerships.
“We have years ahead of us where we will be 100% focused on building capacity for higher income individuals and corporations. During this time, the audit rates of average taxpayers will not increase,” Werfel said.
“People who get W-2s or Social Security payments, or have a small business, should not be worried about some new wave of IRS audits. We’re taking that off the table,” he added.
Previously, Treasury Secretary Janet Yellen said that audit rates for those earning…
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