Sen. Mike Crapo (R-Idaho) recently proposed an amendment to the Inflation Reduction Act of 2022 that he says would prevent the IRS from auditing taxpayers with incomes less than $400,000. | Sen. Mike Crapo/Facebook
Sen. Mike Crapo (R-Idaho) recently proposed an amendment to the Inflation Reduction Act of 2022 that he says would prevent the IRS from auditing taxpayers with incomes less than $400,000. | Sen. Mike Crapo/Facebook
U.S. Sen. Bob Casey (D-PA) voted to authorize $80 billion for new IRS agents that would have the authority to audit Americans with no limits on income, and also rejected a bill that would have guaranteed that no American with an income of less than $400,000 could be audited.
According to the Tampa Free Press, the Inflation Reduction Act of 2022 contains $80 billion that President Joe Biden plans to use to hire IRS agents. This is more than six times the current IRS budget. The Associated Press reported that this plan is due to the expected large amount of IRS employees retiring or quitting in years to come.
U.S. Sen. Mike Crapo (R-Idaho), a ranking member of the Senate Finance Committee, filed an amendment to the Democrats’ bill that he and many Republicans believe to be misleading. His amendment would prevent the IRS from using any of the earmarked funds for audits on Americans with taxable incomes lower than $400,000, including both individuals and small businesses.
“The reality is a significant portion raised from their IRS funding bloat would come from taxpayers with income below $400,000,” Crapo said to the Tampa Free Press. “My colleagues and Americans know the real answer: small business owners, cash-heavy businesses, and those who can’t afford legal teams are easy targets for the new IRS agents and their audits.”
According to a May report from the Government Accountability Office, audits decreased for all income levels from 2010 to 2019, but audit rates for taxpayers with incomes of $200,000 or above declined the most. IRS officials attributed this to reduced staffing due to decreased funding. It has also been said that lower-income audits are generally less complex and more automated, so they can still be conducted even with fewer staff.
Moreover, Syracuse University's Transactional Records Access Clearinghouse found that low-income wage earners making less than $25,000 were audited at a rate five times higher than other wage earners in the fiscal year 2021.
"The IRS absolutely targets lower-income taxpayers for audits, in my opinion," Benjamin Wilkerson, an attorney at North Mississippi Rural Legal Services, told Just the News.
Crapo also said Americans can expect “more taxes, more spending and higher prices, and an army of IRS Auditors” due to the Inflation Reduction Act. The Senate Finance Committee reported that Senate Democrats voted down along party lines, 50-50. This included Casey.
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