Elizabeth Warren is trying to triple, the budget for the IRS. The additional money would be earmarked for increased audits for businesses and individuals making $2 million or more a year.
Audits are very expensive to operate and not all audits result in additional taxes to be paid. Therefore, tripling the budget does not guaranty increased revenue.
Now, I have no objection to increasing the budget in order to to collect money from those seeking to cheat the tax man. But I do have two fears. The first one is if the amount of money raised does not make the added cost worth their while, they tend to bring charges that are not warranted and therefore prove costly to those who are innocent but prosecuted anyway.
My second fear is that that the IRS will become weaponized and will concentrate on conservatives while leaving Democratic donors free as a bird. The Democratic donors could end up contributing big money in exchange for no audit.
“For too long, the wealthiest Americans and big corporations have been able to use lawyers, accountants, and lobbyists to avoid paying their fair share — and budget cuts have hollowed out the IRS so it doesn’t have the resources to go after wealthy tax cheats. The IRS should have more — and more stable — resources to do its job, and my bill would do just that.”
The senator’s proposal would increase the IRS’s budget to $31.5 billion, which is almost three times as much as its current budget of $11.9 billion.
Beyond bolstering the IRS’s budget, Warren’s bill would add additional reporting requirements for banks to disclose activities of their clients.
It would further require the tax collection agency “to create a plan, and report annually on implementation progress, to shift audits towards high-income, high-wealth tax filers and corporations.”
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If made into law, the bill would also increase tax penalties for underpayment on taxpayers with income above $2 million, and apply the False Claims Act — additional charges for allegedly lying to the government — to taxpayers who earn more than $10 million who have a misstatement on their return.