Is Biden Hiring 87,000 New IRS Agents? Not Exactly.

A new meme started by Republican leaders is mostly false.

TIME (“Trump Allies Are Attacking Biden For a Plan to Hire 87,000 New IRS Agents That Doesn’t Exist“):

Since news broke on Monday that the FBI searched former President Donald Trump’s South Florida home, Republican members of Congress and right-wing media figures have launched a new line of attack against Democrats: that the Internal Revenue Service intends to use nearly $80 billion in new funding to pursue similar intrusions on average Americans. Those dollars, Trump allies are saying, will go toward the hiring of 87,000 new IRS agents.

“Do you make $75,000 or less?” tweeted House Minority Leader Kevin McCarthy. “Democrats’ new army of 87,000 IRS agents will be coming for you—with 710,000 new audits for Americans who earn less than $75k.” Richard Grenell, Trump’s former Acting Director of National Intelligence, wrote on the social media platform: “The FBI raids Trump’s house and the Democrats vote to add 87,000 new IRS agents to go after Americans. Wake up, America.”

Other high-profile conservatives have insinuated that the Biden administration intends to direct those additional auditors to dig up dirt on the President’s political opponents. “After todays raid on Mar A Lago what do you think the left plans to use those 87,000 new IRS agents for?” tweeted Sen. Marco Rubio.

It’s a notion that has taken off like wildfire, signaling what is likely to be a prominent broadside from Republicans against Democrats in the midterm elections.

I’ve definitely seen this going around on Facebook, including from folks who are fairly intelligent and not prone to extremist nonsense.

There’s only one problem. It’s not true.

As problems go, that’s pretty significant.

The Inflation Reduction Act, a landmark climate, health care and tax package that passed the Senate on Sunday and is expected to head to Biden’s desk after the House approves it on Friday, includes roughly $78 billion for the IRS to be phased in over 10 years. A Treasury Department report from May 2021 estimated that such an investment would enable the agency to hire roughly 87,000 employees by 2031. But most of those hires would not be Internal Revenue agents, and wouldn’t be new positions.

So, it’s more truthy than an outright lie. The 87,000 number is real, it’s just being misrepresented.

According to a Treasury Department official, the funds would cover a wide range of positions including IT technicians and taxpayer services support staff, as well as experienced auditors who would be largely tasked with cracking down on corporate and high-income tax evaders.

From the standpoint of an ordinary citizen, calling the latter “IRS agents” isn’t unreasonable. But, surely, IT techs and service support staff shouldn’t be characterized this way.

“It is wholly inaccurate to describe any of these resources as being about increasing audit scrutiny of the middle class or small businesses,” Natasha Sarin, a counselor for tax policy and implementation at the Treasury Department, tells TIME.

So, I’m actually skeptical of that. Rather obviously, neither the Biden administration nor Congressional leadership intended to sic the IRS against the little guy with this new funding. Their rhetoric, which I believe, is about going after the big fish who are skirting the rules to radically underpay what they owe. Still, as noted a week ago in “Coming IRS Crackdown?” Congress’ own independent tax staff estimates that “78% to 90% of the money raised from under-reported income would likely come from those making less than $200,000 a year.” Further, small businesses, especially “pass throughs” including Subchapter S businesses that file under the individual tax code, are likely a particular audit target.

At the same time, more than half of the agency’s current employees are eligible for retirement and are expected to leave the agency within the next five years. “There’s a big wave of attrition that’s coming and a lot of these resources are just about filling those positions,” says Sarin, an economist who has studied tax avoidance extensively and who was tapped by the Biden administration to beef up the IRS’s auditing power.

It’s honestly weird to include the replacement of positions that will naturally attrite in one’s hiring report. It just sets up this sort of wild conjecture.

In all, the IRS might net roughly 20,000 to 30,000 more employees from the new funding, enough to restore the tax-collecting agency’s staff to where it was roughly a decade ago.

Finally, we get to the key point and it’s one I’ve pointed to many times* in recent years: the IRS has slowly been gutted during times of Republican government.

The IRS currently has roughly 78,000 employees. According to John Koskinen, who served as IRS commissioner from 2013 to 2017, that’s down from around 100,000 when he first started. By the time he resigned four years later, he said, it was clear that the agency was in the grip of a systematic attempt by the GOP to weaken it.

“Nobody loves tax collectors,” Koskinen tells TIME.

It’s an effort that goes back to 2010, when Republicans took back control of the House of Representatives and immediately instituted a series of crippling cuts on the IRS. Since then, overall funding for the IRS has fallen further, by more than 20 percent, while enforcement funding has dropped by 31 percent. That’s made it easier for high-net-worth tax cheats and major corporations to avoid federal taxes to the tune of billions of dollars.

“The largest corporations in the United States with over $20 billion of assets have had their rate of audits go from nearly 100% to 50%,” says Janet Holtzblattt, a senior fellow at the Urban-Brookings Tax Policy Center. “Among wealthy individuals who had a positive income of a million dollars or more, the audit rate fell from 8.4% in 2010 to 2.4% in 2019.”

This, naturally, was the whole point of the cuts. Not only does it benefit companies who tend to be Republican-friendly but it also reduces government revenue, making it harder for new programs to “pay for themselves” and therefore advance the long-term goal of making government so small you could drown it in a bathtub.

Meanwhile, the employee shortage only made it harder for average Americans to reach IRS customer support, which has been inundated with requests far beyond what the staff could handle. “I used to say there’s no Democratic or Republican way to run the IRS,” Koskinen says. “The people who are significantly disadvantaged are the average taxpayers who have a simple question and can’t get through. Those are Republicans as well as independents and Democrats.” As of last month, the IRS backlog included 10.2 million unprocessed individual returns.

This is also diabolical, in that it vexes ordinary folks trying to file their own taxes—as required by law—thus further turning them against the Federal government, its bureaucracies, and the whole process of paying one’s taxes.

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*See especially my spring 2019 posts “Taxing the Very Rich” and “It’s Hard to Audit the Rich, So We Go After the Poor.”

FILED UNDER: Taxes, US Politics, , , , , , , , , , , , , ,
James Joyner
About James Joyner
James Joyner is Professor and Department Head of Security Studies at Marine Corps University's Command and Staff College and a nonresident senior fellow at the Scowcroft Center for Strategy and Security at the Atlantic Council. He's a former Army officer and Desert Storm vet. Views expressed here are his own. Follow James on Twitter @DrJJoyner.

Comments

  1. Scott says:

    I pointed this article yesterday. Relevant to this discussion. There is a desperate need for basic investment in infrastructure. Can you imagine working there?

    Why does the IRS need $80 billion? Just look at its cafeteria.

    It’s part of what the IRS calls the “Pipeline”: a 1970s-era assembly line used to process tax returns at several locations around the country. And it might give you a sense of why Congress is on the verge of handing the agency $80 billion through the Inflation Reduction Act — not only for more enforcement but also for tech modernization.

    As of July 29, the IRS had a backlog of 10.2 million unprocessed individual returns. Blame the pandemic, sure, but also the agency’s embarrassingly outdated, paper-based system, which leaves stacks and stacks of returns cluttering shelves, hallways and even the cafeteria.

    On the Pipeline, paper tax returns aren’t scanned into computers; instead, IRS employees manually keystroke the numbers from each document into the system, digit by digit

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  2. Scott says:

    For all you heathens out there.

    “Nobody loves tax collectors,” Koskinen tells TIME.

    “Truly I tell you, the tax collectors and the prostitutes are entering the kingdom of God ahead of you. ” Matthew 21:31

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  3. wr says:

    Almost ten years ago I had some issues I needed to discuss with someone at the IRS, and the only way to do that was to call them. So I did. When I reached an agent, it was an easy and fruitful conversation, and we dealt with my issues in minutes.

    But only after I had been on hold for four hours.

    So I’m all for hiring as many new IRS employees as possible…

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  4. Daryl and his brother Darryl says:

    “The largest corporations in the United States with over $20 billion of assets have had their rate of audits go from nearly 100% to 50%…Among wealthy individuals who had a positive income of a million dollars or more, the audit rate fell from 8.4% in 2010 to 2.4% in 2019.”

    These are astounding numbers surpassed only by this.

    An estimated $600 billion in taxes will go uncollected this year because the IRS doesn’t have the people and technology it needs to enforce the existing tax law.

    No one likes taxes – but I really don’t like other people not paying their fair share.
    In other news; the former guy is testifying today in the NY case that alleges the Trump Organization intentionally and habitually misstated the value of prized assets like golf courses and skyscrapers, misleading lenders and tax authorities.

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  5. Neil Hudelson says:

    @wr:

    I can assure you it’s only gotten worse. Starting about 5 years ago they made it next to impossible to reach a live agent (likely because there are so few around to help). Here’s the actual process to reach a person, a process that is not at all explained in the IRS’s automated phone messages or on the IRS’s website, and which others have had to figure out and publish:

    -Call the IRS at 1-800-829-1040 during their support hours
    of 7 AM to 7 PM local time Monday to Friday.
    -Select your language, pressing 1 for English or 2 for Spanish.
    -Press 2 for questions about your personal income taxes.
    -Press 1 for questions about a form already filed or a payment.
    -Press 3 for all other questions.
    -Press 2 for all other questions.
    Make no entry when queried for the SSN. You will be asked multiple times to enter this in, do not do it. Eventually you will be given options to continue.
    Press 2 for personal or individual tax questions.
    Press 4 for all other questions.

    Once I finally did get an agent, they were indeed helpful. But, as we discovered, there’s not tracking of a person’s call. When our tax return was delayed by a year, then two years, each time we had to connect with a new agent, explain to them our case, and hope that they were able to find our information–they weren’t always able to, either because of poor systems or previous agents didn’t make notes. After about 2.5 years we finally got our return. The good news? When the IRS takes that long, they pay you interest, a couple hundred in our case.

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  6. Scott F. says:

    I’ve definitely seen this going around on Facebook, including from folks who are fairly intelligent and not prone to extremist nonsense.

    It seems very generous to label as “fairly intelligent and not prone to extremist nonsense” anyone on Facebook posting this stuff. This IRS line is an obvious smoke-screen to distract from Trump’s criminality. Marco Rubio gives away the game:

    “After todays raid on Mar A Lago what do you think the left plans to use those 87,000 new IRS agents for?” tweeted Sen. Marco Rubio.

    BTW, Rubio is a senior Senator and former candidate for the Republican nomination for President. For those in the “Republicans are better at messaging” camp here, anyone think the GOP will pay a price with their loud calls to Defund the FBI and IRS?

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  7. becca says:

    More republican sabotage of America. There is no institution they will not degrade or destroy to support their other Big Lie, that the federal government is the enemy of the people. Diabolical, indeed.

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  8. Tony W says:

    …something, something, just comply….

    Why would Republicans be concerned about an audit in the first place?

    87000 new agents means that I will stop paying higher taxes so that my tax cheat neighbors can get away with breaking the law.

    I see that as a good thing.

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  9. Just nutha ignint cracker says:

    It’s honestly weird to include the replacement of positions that will naturally attrite in one’s hiring report. It just sets up this sort of wild conjecture.

    Not so much when SOP for Republiqans talking about shrinking the government when they’re not in power as “laying off critical infrastructure personnel–sending them into the street to be homeless and alone” so that it’s necessary for the agency in which the staff is being reduced to explain that most of the reductions will be absorbed by retirements and not rehiring short-term employees.

  10. Just nutha ignint cracker says:

    @becca: I’m not seeing the cognitive dissonance there, but maybe it’s because at least some of the time when the GQP is in power they seem to act like enemies of the people. Hmmmm…

  11. Modulo Myself says:

    Some of these scare stories about audits sound so implausible. ‘I did nothing wrong but my accountant advised me to pay what the IRS asked for rather than fight’ seems to mean either you made a very small error and paid a tiny amount, or you cheated on your taxes and you are lying through your teeth. I’m sure there are people out there with very complicated tax situations, but if you have a complex financial life, you have enough money to make it complex and you can fight it.

    I do wonder how many people in this country are straight-up cheating on taxes and getting away with it because the IRS has been underfunded. These scare stories should not be resonating with people who have a W-2, a mortgage, and a few capital gains. There’s just very little credible wiggle-room for most middle-class wage/salary earners. Unless you are lying through your teeth.

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  12. Daryl and his brother Darryl says:

    @Daryl and his brother Darryl:
    Just to follow; the former guy invoked his Fifth Amendment rights in the NY case that alleges the Trump Organization intentionally and habitually misstated the value of prized assets like golf courses and skyscrapers, misleading lenders and tax authorities.

    1
  13. Jc says:

    Like said above, it’s IRS support positions. So many questions so few people to answer them. I would love to see more agents hired who actually go after these S Corp “gamers”. Because I can assure there are a ton gaming the system, and if they can skirt by 3-5 years without nary a letter, audit, etc…they just keep doing it.

    1
  14. HTD says:

    Tax‐code complexity increases tax avoidance and evasion by making compliance more difficult and by prompting/forcing taxpayers to combine disparate provisions in unexpected ways. The new Bill adds even more complexity to a crazy tax code. The average annual return filed by corporations making over $10M is 9000 pages! Want people and corps to pay their fair share? The answer is first, simplifying the tax code NOT hiring more people to enforce provisions even they don’t understand. Second, if you want “corporations to pay their fair share” (sigh, corporations don’t pay taxes, they collect them from their customers) move from the antiquated personnel-based tax to a profit-based tax system. Our tax system was built when the most profitable corps. had the most employees. No longer the case. The only companies that pay full taxes are hotels and restaurants. The most personnel-heavy businesses. But Democrats, who are vastly over-funded by high-tech companies with huge profit per-employee systems, will NEVER agree to that. BTW, the $400,000 fictional limit Biden points to is NOT indexed. How many people will be earning $400,000 in 10-20 years when the hiring will be completed? In the last 20 years the median family income increased by 57%.