Biden's IRS Revamp Brings In $500M -- So Far -- From Millionaire Deadbeats

Despite false claims by congressional Republicans that Democrats would create a massive army of armed Internal Revenue Service agents to harass working families, the Biden administration’s modernization of the agency and crackdown on rich tax cheaters is paying dividends already. So far, the agency has collected about half a billion dollars in revenue owed by the wealthiest Americans.

According to an IRS statement released on January 12, funds from the Inflation Reduction Act of 2022 have enabled the agency to recover “$482 million in ongoing efforts to recoup taxes owed by 1,600 millionaires.” At least $360 million of that has come in since late October. The agency is also prioritizing enforcement efforts against large corporations that have underpaid what they owe.

Without a single Republican vote, Democrats in Congress and President Joe Biden enacted the 2022 law, which included an $80 billion investment in the IRS over a decade to tighten tax enforcement for wealthy individuals and businesses and to allow the agency to update its information technology systems.

Republicans in Congress, including members of the Michigan delegation, opposed the effort and repeatedly lied about it, saying that it would fund 87,000 new IRS agents to target the middle class.

“Dems are hiring 87,000 new IRS agents to come after you. That’s more people than can fit in Spartan Stadium,“ tweeted Rep. Lisa McClain (R-MI) in August 2022. “That’s a NO from me!”

“Inflation is at a 40-year high and the economy is in the grips of a recession. Democrats’ response is a massive spending bill that will raise taxes and hire 87,000 IRS agents to target hardworking families,” wrote Rep. Tim Walberg (R-MI). ”It’s reckless, wrong, and out of touch.”

Treasury Secretary Janet Yellen directed that the new funds not be used to increase the share of audits of families earning below $400,000 annually or of small businesses. “In fact, we expect audit rates for honest taxpayers to decline,” she predicted in a September 2022 speech, “once the IRS has the right technological infrastructure in place.”

After gaining a narrow majority in the House the midterm elections, Republicans attempted to repeal the new IRS funding entirely. In one of their first votes in January 2023, they passed the Family and Small Business Taxpayer Protection Act on a party-line vote.

Republican Reps. Jack Bergman, Bill Huizenga, John James, McClain, John Moolenaar, and Walberg all voted in favor.

According to a January 2023 CNN fact check, the false claim about 87,000 agents stemmed from a 2021 Treasury Department report that noted that the funds could enable 86,952 full-time employees to be hired over a decade. Not all of those would be agents, and many would replace 52,000 current employees expected to retire by 2028.

The bill has not come up for a vote in the Democratic-led Senate, though both parties have agreed on more modest IRS funding cuts of $20 billion as part of debt ceiling and budget compromises.

According to the nonpartisan Congressional Budget Office’s estimates, the original Inflation Reduction Act investment of $80 billion was expected to bring in about $180 billion in additional revenue owed to the government, bringing down the deficit by more than $100 billion over a decade.

A January 2022 poll by Data for Progress found that 68 percent of likely voters supported the IRS doing more “to make sure that wealthy Americans are paying their fair share in taxes.”

A January 2024 Navigator poll found 67 percent of registered voters support the Inflation Reduction Act in general, while 22 percent oppose it.

Reprinted with permission from The Michigan Independent