The Internal Revenue Service (IRS) is set to hire 87,000 new agents as part of the Democrats’ so-called Inflation Reduction Act. White House press secretary Karine Jean-Pierre said there won’t be any new audits of people making less than $400,000 per year. Over 99% of Americans earn less than $400,000 annually and as of May 2022, the IRS reported having just around 6,500 auditors. However, the Biden administration claims that these 87,000 extra agents would only be used to audit the top 1%, with no impact on regular Americans.
Despite the claims of the White House, data suggests middle-class Americans will be targeted by the new audits. Fox Business reported that an analysis from House Republicans showed that “Americans who earn less than $75,000 per year are slated to receive 60% of the additional tax audits.” About three-quarters of Americans live on that yearly income, which includes the lower class and a sizable portion of the middle class. In his report, Fox Business’ Thomas Catenacci explained that “Overall, the IRS would conduct more than 1.2 million more annual audits of Americans’ tax returns” and that people making less than $75,000 annually will be subject to more audits than those making more than $1 million.
The Inflation Reduction Act would nearly double the IRS’s existing budget by allocating an extra $79 billion to the agency over the next decade to strengthen tax enforcement, which is estimated to boost revenue by $124 billion. IRS Commissioner Charles Rettig stated that “audit rates” will not increase compared to previous years in response to complaints over the predicted increase in tax audits under the bill.
During his campaign, Biden promised not to raise taxes on anyone earning less than $400,000 annually. His administration has since committed that the Democrats’ plan won’t lead to more audits of these individuals. Both of these promises are broken by the so-called Inflation Reduction Act, which raises taxes on middle-class Americans and more than doubles the number of IRS agents tasked with collecting their money.
