Increasing The IRS Annual Budget By Seven Times Doesn’t Add Up

The talk in the media is about a “beefed-up” IRS. The IRS budget for FY 2022 totals nearly $14 billion ($11.9 billion in appropriated funds) with a full-time equivalent (FTE) staff ceiling of 79,808 (75,533 from appropriated funding.)

Now, the Democrat-controlled Congress, at the behest of the Biden Administration, wants to take that up an additional almost $80 billion, with 1% going to Department of the Treasury offices other than the IRS. That adds up to nearly $93 billion, seven times this year’s budget. SEVEN TIMES.

In addition, Democrats want to add in another 86,852 FTEs, more than doubling the staffing to 166,660. These positions are described as “new, specialized enforcement staff.” See page 17 of the American Families Plan Tax Compliance Agenda for more. The increased funding and staffing are designed to restore IRS enforcement capability through a sustained rebuilding of the IRS.

According to IRS data, staffing was at a peak in 1995 at 114,064 FTEs. That was before automation, common use internet, and e-filing. Data processing took more than a quarter of all staff.

Within two years, the data processing staff was cut in half—no surprise there—and disappeared altogether as a category a couple of years later. As banking became more automated, collections staff numbers other than revenue officers were reduced by two-thirds. With the advent of e-filing, the filing and account management staff declined. Staffing has been more or less at today’s level for a decade, which is eminently reasonable as more sophisticated automation is available to both the IRS and the taxpayer. Under these circumstances, the IRS will not be rebuilding its old structure nor restoring anything that may have been lost. So, what’s going on?

Something doesn’t add up. We know through observing Biden Administration and Congressional activities over the past half year that it takes about $80 billion to cover our costs for a proxy war between the US/NATO and another nuclear power.

While practice doesn’t always make perfect, it certainly sets a pattern. Now, the same actors plan to spend $80 billion going after unpaid income taxes. However, it looks more like Biden and his pet Congresscritters are about to fund a war on We the People.

Too much, you say? Well, we’ve been bombarded from all sides with a reduction in domestic fuel supplies and a corresponding doubling in price at the pump; instability in stock, commodities, housing, and precious metals markets; record inflation rates across all sectors; and stuttering food shortages they tell us will only get worse. All courtesy of Biden and the Dems. Softening us up for a bigger blow, maybe?

On April 29, 2021, Biden announced as part of his Jobs and Family Plan that the IRS was going to crack down on millionaires and billionaires who cheat on their taxes. Billions of dollars, he promised, would be recovered. Within a few days, Treasury estimated that, as of 2019, $600 billion in back taxes were owed. It opined that, for every dollar spent on enforcement, $4 could be recovered. The Biden administration treats this as a straight-line proposition, but the pool of tax cheats is not large, and the recoverable funds are not infinite. Over time, as enforcement is increasingly effective, less and less funding will be recovered.

Biden’s Build Back Better Framework, issued in October 2021, noted that wage earners had a 99% tax compliance rate and that the miscreant 1% evades about $160 billion per year in taxes. Sounds like a lot, but it’s not too bad actually: that’s just 4% of the $3.863 trillion taken in. Given that perfection will always elude us, at what point does this become statistically insignificant and unjustifiably wasteful? There are about 12,000 “agents” in the IRS, and about 145 million taxpayers. Do we really need 87,000 more agents to address issues with maybe a million and a half taxpayers? Absolutely not!

So, again, what’s this money for? In the original BBB bill, this section took up a page. Now, it’s ten pages long. It starts on page 1926 of the current version of H.R. 5376 and on page 31 of the Senate’s draft Inflation Reduction Act; versions are slightly different but the total is the same. In the $45 billion enforcement section, we’ve got “…to provide digital asset monitoring….”

If that doesn’t make the hairs on the back of your neck stand up I don’t know what...

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