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The IRS Should Serve Taxpayers Not Work Against Them

Adrian Smith 3rd Dist

As the 2024 tax deadline nears, Americans are well aware of the outsized impact the Internal Revenue Service can have on their time, attention, and pocketbooks. From supersized agency funding to new reporting requirements on Venmo and PayPal transactions which amount to a “Babysitter Tax” to expanding IRS efforts to take over Americans’ tax preparation and tell them what they owe, the Biden administration’s IRS has continued to expand its intrusion into the daily lives of American families. Oversight and accountability for the policy, resources, and taxpayer service record of the IRS has never been more needed or warranted.

The Democrats’ 2022 Inflation Act bloated IRS funding, devoting $80 billion for the hiring of 87,000 new agents, most of them dedicated to cracking down on hard-working American taxpayers. Since then, the IRS has increased audit pressure on middle-class families and small businesses and struggled to recruit new employees.

In a labor market still hamstrung by a languishing workforce participation rate, it’s unsurprising an agency with a less than stalwart record of service is having difficulty finding new hires. While the agency had a goal to bring on 3,833 revenue agents in Fiscal Year 2023, according to a report by the Treasury Inspector General for Tax Administration, in the first six months officials had recruited just 34.

In February 2024, the height of tax season, IRS Commissioner Daniel Werfel testified before the Ways and Means Committee remote work rates for the government agency are as high as 50 percent. With half its workforce off-site, this raises many concerns about IRS’ ability to efficiently process filings and returns and adequately serve American taxpayers.

While President Biden and other proponents of IRS funding repeatedly claimed newly planned audits would not target middle class families and small businesses, this has not turned out to be true. In fact, by Treasury Secretary Janet Yellen’s own admission, it was clear the administration never intended to shield middle and low-income filers from burdensome audits. When I asked in a March 2023 Ways and Means Committee hearing, Sec. Yellen admitted her own instructions were for new audits on families making less than $400,000 to continue at “historically similar rates.” Sure enough, in 2023, we have seen 63 percent of new audits target taxpayers with incomes less than $200,000.

Forcing more hardworking middle-class Americans to incur the expense of answering audits despite having paid their taxes and done what they were supposed to do, is not a path to fiscal solvency and economic growth. Neither is raising taxes. Yet President Biden seems to believe he can tax his way to prosperity. His recent budget proposal calls for a $4.9 trillion net increase in taxes and seeks to extend the high IRS funding levels initiated by the Inflation Act. As record inflation has wiped out household savings and ballooned everyday expenses, we desperately need small businesses and job creators to be part of the solution to our economic challenges. President Biden’s tax policy instead punishes success and discourages growth.

This is exactly why House Republicans made my bill with Rep. Michelle Steel to rescind IRS's $80 billion expansion the first bill passed this Congress and why I supported clawing back $10.2 billion of these funds in the most recent appropriations legislation. Americans want an IRS that works for them, not against them. Yet, the Biden administration has shown a readiness to vilify taxpayers and blame job creators for inflation. My bill to rescind the $80 billion in IRS funding would ensure the agency is focused on making much needed improvements to taxpayer service, yet the Senate refuses to take it up.

As federal revenue since the 2017 Tax Cuts and Jobs Act has exceeded projections, it’s clear we do not have a crisis of revenue. We need to get back to commonsense policies empowering American families and small businesses. I will continue fighting for an IRS accountable to the Americans it is supposed to serve.