Headline RoundupAugust 11th, 2022

Inflation Reduction Act: Would New IRS Tax Enforcement Target the Middle Class?

AllSides Summary

Democrats’ Inflation Reduction Act aims to raise $200 billion over the next decade by helping the IRS increase tax enforcement and close loopholes. Will it work, and will it avoid targeting the middle class?

The IRS has long requested additional funds to modernize its outdated technology and add to its shrinking workforce; in April, IRS Commissioner Chuck Rettig said the 2022 tax season was “unlike any other” due to these challenges. Responding to these requests, the Inflation Reduction Act includes almost $80 billion for the IRS — potentially nearly doubling the average yearly IRS budget through 2031. Democrats say the increased tax enforcement will target big corporations and the wealthy, but a report released by House Republicans said it would result in over 700,000 more audits of people making less than $75,000 per year.

While the IRS said its increased enforcement would not target small businesses or the middle class, voices from the right were broadly skeptical, often pointing to a Treasury Department proposal to hire 87,000 IRS workers over the next decade. Rep. Jason Smith (R-Mo.) said the increased IRS enforcement would force “hardworking Americans” to “live in fear” of audits.

Perspectives from the left were less common and tended to defend the bill; an AP (Lean Left bias) fact check said Republicans were “distorting” the bill by making claims that were “not supported by what is in the legislation.”

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