The Taxman is Coming
One estimate is that there is between $500 billion and $1 Trillion in untaxed money in the American economy. From under reporting to down right fraud there is a lot of money flowing under the table. The IRS has an under-reporting program based on variance from the reporting down by third parties and what is reported to the IRS by taxpayers. If you forget to include that withdrawal from your retirement account, then the IRS computers will usually catch something like that and generate a proposed billing to the taxpayer.
The under-reporting system and the very limited audits done by the IRS recoup about $60 billion per year. Tax cuts and early retirements have gutted the IRS making them incapable of doing any more than that. However, President Biden has proposed investing $80 billion dollars into the IRS over the next ten years. He is convinced that the rich in America are cheating left and right.
do agree that the IRS is underfunded and overworked. The money he is proposing should overhaul the legacy technology that the IRS uses and provide the equipment needed to send out checks to most of the right people while denying them to those that are the wrong people. Imagine what that would have done for the stimulus checks.
In addition, the budget would call for hiring and training more revenue agents to begin conducting the tax audits that occurred with regular frequency twenty years ago. Well, the audits being done for the perceived rich will increase in frequency, but not everyone will feel that the tax man cometh. The Treasury promises that the increase in auditing will be reserved for those making $400,000 and higher. I guess they don’t care if the poor people cheat, pay employee under the table, report fictitious inventory, or claim excessive deductions. Even with this limitation it is estimated that the investment will bring in $700 billion more in tax dollars to the treasury.
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