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Posts published in “Day: May 31, 2023”

IRS accountability

Idaho Sens. Mike Crapo and Jim Risch have given at least 80 billion more reasons to hate the Internal Revenue Service, which has never been in danger of winning popularity contests.

That’s how many more dollars the IRS is spending to crack down on tax cheaters and otherwise make life miserable for those who don’t cheat and get caught up in the tangled web of tax audits.

Chris Edwards, a tax and budget specialist with the Cato Institute, has written about the end result for most of us. “More aggressive enforcement would mean more paperwork, more lawyer fees, more time consumed on tax matters and more anguish and uncertainty for taxpayers. It could also result in less privacy and personal financial security.”

This isn’t about the IRS going after rich people. The IRS’ target could include those making less than $400,000 a year. Don’t underestimate the agency’s ability to show those Washington politicians that they are getting their $80 billion worth. Crapo, the ranking member of the Finance Committee, is asking for transparency and accountability.

“Unease about super-sized IRS enforcement hiring has nothing to do with supporting evasion by ‘wealthy tax cheats,’ but comes from fear that the IRS will waste untold taxpayer dollars chasing speculative or marginal revenue recoveries, while hardworking Americans and small businesses end up in a dragnet,” Crapo wrote in a recent op-ed. “The majority of the $80 billion funding boost for the IRS was earmarked for aggressive enforcement, while just a sliver was set aside to improve customer service.”

Says Risch: “It (the IRS) did not use these additional staffers to expedite your returns or ease your filing experience. I’m concerned how the IRS is treating Americans. In the last few years, President Biden empowered the IRS to bully hardworking Americans into settlements under the threat of financial penalties.”

Some of that $80 billion could go to other purposes if Congress approves the budget deal worked out between President Biden and House Speaker Kevin McCarthy. But the IRS still has plenty of extra funds to work with.

The Idaho Republicans won’t have to look far for a presidential candidate to sign on with their cause. Earlier this year, Sen. Tim Scott of South Carolina – who recently announced his bid for the GOP presidential nomination --joined Crapo and Risch on on their legislative efforts to prohibit the IRS from financial surveillance.

Of course, there’s no chance of getting Republican-sponsored bills of that nature through the Democratic-controlled Senate. It’s also curtains for the IRS Accountability and Taxpayer Protection Act, pushed by Crapo and Risch. But for Scott, one of a growing list of Republicans trying to spare us from Donald Trump, taking aim at the IRS isn’t a bad platform for a presidential run.

Edwards, in his piece for Cato, makes some good points about the pitfalls that go with more aggressive enforcement by the IRS.

“Supporters think that greater enforcement would be good policy because the expected higher tax revenues would outweigh the cost of higher IRS spending,” he wrote. “But that ignores the higher costs that would be imposed on the private sector, including tax compliance burdens and the loss of civil liberties.”

Believe it or not, the IRS makes mistakes – perhaps as much as 90 percent of the time on tax audits, according to one expert. “Which the agency gets away with because many taxpayers won’t challenge them,” says Edwards.

Good luck in getting the IRS, and its army of lawyers, to admit to making a mistake, says Edwards. “More IRS enforcement means more targeting of people who end up being innocent. Individuals and businesses will have to invest more time and more money in lawyer fees to defend against false IRS claims.”

Crapo points out that the IRS code requires the agency to “act in accord” with codified taxpayer rights, including the right to be informed; the right to quality service; the right to challenge the position of the IRS and be heard; the right to privacy; and the right to confidentiality.

“Idahoans have time-and-again seen the IRS fail to meet these obligations and rightly concerned about the vitality of their taxpayer rights,” Crapo wrote.

The senior senator has justifiable reservations about the IRS and its bulging budget. But with Democrats in control of the Senate and White House, there’s little that he can do aside from writing convincing op-eds.

Chuck Malloy is a long-time Idaho journalist and columnist. He may be reached at