Keystone Today

The Inflation Reduction Act was passed in August and while Democrats like John Fetterman, who is the lieutenant governor of Pennsylvania and nominee for the U.S. Senate, approve of the bill, Republicans like Sen. Mike Crapo (R-ID) have publicly voiced their disapproval.

“Make no mistake: American taxpayers of all income levels should brace for more audits, investigations and tax enforcement under the massive new IRS funding increase. Taxpayers deserve better services, not broken promises,” Crapo said on Twitter, while also posting an article by Fox News about how money has been allocated to hire an “army” of IRS agents.

According to the Washington Post Fact Checker Glenn Kessler, the May 2021 Treasury report showed that about $80 billion in funding will allow the hiring of 86,852 new IRS employees over 10 years. The Treasury report adds that the new employees would be added in groups of 7,000 to 12,000 each year and “would conduct audits, improve informational technology and enhance customer service.”

The Inflation Reduction Act of 2022 passed 51-50 in August, with all 50 Democrat senators voting for the bill and no Republican senators voting in favor. Vice President Kamala Harris was the tiebreaker vote to pass the legislation. Fetterman said in a tweet that he would have voted “yes” on the bill, saying “more affordable energy + health care + prescription drugs for PA residents.”

Fox Business reported that Americans making less than $75,000 per year receive the majority of IRS audits. It added that 1.2 million more audits will be added on American tax returns. The report said that the IRS is expected to increase revenue by $124 billion. In response to critics, IRS Commissioner Charles Rettig said audits would not be increasing despite the passing of the Inflation Reduction Act.

On Sept. 25 House Republicans released their “Commitment to America” agenda that outlines top priorities if they win the House in the upcoming midterm elections. “The first thing we will do when we earn back the House this November is to repeal the 87,000 IRS agents Joe Biden and House Democrats’ hired," they tweeted.

In an interview with the Center Square, Karen Kerrigan, president and CEO of the Small Business and Entrepreneurship Council, said, “There is no doubt that boosting IRS audit capabilities through a vast increase in the hiring of 87,000 new staff focused on this effort will hit small businesses the hardest. “The tax data shows that it is small businesses of moderate means, not ‘the wealthy,’ that are targeted most frequently."

The Center Square notes that, in fiscal year 2021, the IRS had 78,661 full-time employees; with the addition of 87,000 new IRS employees, it will have more than doubled. Kerrigan adds that many small business owners do not have the resources to respond to an IRS audit by hiring accountants or lawyers. Kerrigan claims small businesses are also struggling to stay afloat with inflation and rising costs: “Dealing with crushing inflation and the economic downturn is unbearable enough for small business owners, without having this type of threat hanging over their heads.”

The Washington Post fact checker said that the IRS has been underfunded in the past which has led to lengthy times to process tax returns. The Washington Post reported that the Treasury officials have yet to determine the exact amount that will be hired, but $46 billion is being allocated for “enforcement.” The Fact Checker said that the IRS will grow between 25 and 30%, which contradicts Republican claim that it will double in size.

There fact checker added that more than half of the current IRS employees are eligible to retire in the next five years. It added that the plan is to hire 87,000 “IRS employees” over 10 years, and not IRS audit agents. These will replace people retiring soon, with the report saying, “that’s a big difference.”

According to CBS News, the IRS targets households earning $25,000 per year or less about five times more than others. The report, which was published in March 2021 before the Inflation Reduction Act was passed, said that audits are happening with a limited number of IRS employees.

"It's unbelievable, the focus and targeting on the poorest families," Susan B. Long, co-director of TRAC and a professor of managerial statistics at Syracuse said. "It's five times the rate for everyone else — does this really make sense?"

According to the Small Business Administration (SBA), as of 2021 there were 1.1 million small businesses making up 99.6% of total businesses in Pennsylvania. There are also 2.5 million small business employees, which makes up 46.3% of Pennsylvania employees.