Washington D.C. – Steady, long-term investments in the IRS workforce, as proposed today by President Biden, will equip the agency to catch more tax dodgers, collect the revenue that is rightfully owed and build confidence that the tax code is enforced fully and fairly on all Americans.
“It is common sense that having more revenue officers and revenue agents on the job cuts down on tax evasion, so this plan to restore the IRS’ enforcement division to its full potential is a smart solution,” said National Treasury Employees Union President Tony Reardon. “The IRS and outside experts all agree that for every dollar we spend on enforcement, the agency collects at least $6, which is an excellent return on investment.”
The American Families Plan, announced today by the White House, reportedly calls for an additional $80 billion over 10 years for enforcement activities at the IRS. The administration estimates the added investment will generate $700 billion over 10 years by making sure the IRS has the resources to properly audit even the most complicated and complex returns from corporations, businesses, estates and higher-income individuals.
To be clear, investing in the IRS after years of budget cuts is not a change in the tax code or a tax increase; it is simply properly funding the agency responsible for collecting 95 percent of the money needed to run the federal government.
NTEU for years has alerted Congress to the damage done by 10 years of budget cuts at the IRS, including explosive growth in the tax gap, which is the agency’s estimate of taxes owed but not collected. IRS Commissioner Charles Rettig testified recently it may be more than $1 trillion per year, a shocking number that has prompted Democrats and Republicans alike to consider reinvesting in the IRS.
“The statistics show that when the IRS has a full staff of well-trained, professional civil servants answering taxpayer questions, conducting audits and deterring would-be cheaters, the entire tax system works more efficiently,” Reardon said.
As noted in the American Families Plan, audit rates on millionaires fell by 80 percent between 2011-18, which correspond with consecutive years of major cuts to the agency’s budget and staffing levels. From 2010-20, overall agency funding decreased more than 22 percent when adjusted for inflation and the agency has 15,000 fewer employees.
Separately, the administration’s proposed budget for fiscal year 2022 would result in a $1 billion increase for IRS enforcement activities. Rettig has testified that the agency could add 4,875 new employees with $1 billion dedicated to enforcement.
NTEU represents employees in 34 federal agencies and offices.