IRS Releases $80 Billion Spending Plan to Increase Enforcement and Services

The Internal Revenue Service released a spending plan Thursday, setting out the agency’s goals to allocate $80 billion in funding from the Inflation Reduction Act over the next decade.

Details: The largest chunk of funds, $47.4 billion, is slated to go toward expanding “enforcement on taxpayers with complex tax filings and high-dollar noncompliance to address the tax gap.” $12.4 billion will go toward efforts to “deliver cutting-edge technology, data, and analytics to operate more effectively.” Remaining funds will be used to “attract, retain, and empower a highly skilled, diverse workforce,” “quickly resolve taxpayer issues,” and “dramatically improve services to help taxpayers meet their obligations and receive the tax incentives for which they are eligible.”

For Context: While increased funds are aimed at increasing tax revenue, both the Biden Administration and agency spokespersons are stressing that the goal is to target high-income earners, aligning with President Biden’s federal spending proposal released last month, which proposed raising taxes on corporations and individuals earning over $400,000 per year. The plan drew backslash from some, with a Wall Street Journal Opinion (Lean Right) writer arguing the audit methodology is flawed, stating, “reported and actual income are different. Indeed, exempting taxpayers with reported income below a certain threshold can create incentives that widen the gap.”

How The Media Covered It: Outlets across the spectrum highlighted concerns from middle-class earners and assurances from the agency. Reuters called Republican claims that the funding increase will target middle-class Americans “erroneous.”