Sen. Elizabeth Warren (D-Massachusetts) is leading a call for increased funding for the Internal Revenue Service (IRS), which is anticipating a “frustrating season” for taxpayers due to underfunding issues brought on by Republicans and corporate interests.
Warren, Senator Jeff Merkley (D. Oregon) and 13 additional senators sent a letter to Treasury Secretary Janet Yellen this week, urging the secretary to do everything in her power to prevent challenges that taxpayers – particularly those who are low-income – may face during this year’s tax season. The lawmakers are calling for a minimum increase by 14 percent in IRS funding each year and an investment of $80 million over the next 10 years, a measure President Joe Biden supported. Proposed last yearTo crack down on tax dodgers who are wealthy.
“We urge you to do everything you can to alleviate challenges for tax filers this year, especially lower-income Americans, while also continuing to work with Congress to make long-overdue investments in the IRS,” they wrote. “We are deeply concerned about the challenges that our constituents will face during this tax filing season, including service issues that have become all too familiar.”
The IRS recently said that it is anticipating “enormous challenges” during this year’s tax season, including delays and service issues. The agency is currently in crisis due to an incredibly chaotic tax season in 2021, which it called “the most challenging year ever for taxpayers” in its annual report. The agency ended the yearWith approximately 6 million unprocessed individual tax return, they closed the filing season with more than 35 million unprocessed returns. This was four times more than before the pandemic.
Warren and his fellow lawmakers noted that only one out of nine requests for assistance were answered by the agency, according to its annual reports. As 2021’s problems spill into 2022, the IRS is warning that taxpayers may face the same issues this year, or worse.
According to the lawmakers, increased funding could alleviate some of these issues and prevent them from occurring in the future.
“It is clear that long-term underfunding, combined with the extra burdens posed by the ongoing pandemic, is the primary reason for the IRS’ challenges,” they wrote.
In a letter to Warren last summer, Chris Rettig, IRS Commissioner, stated that the agency had gotten a 22 percent budget cutSince 2010. This has led to a 22% reduction in staff, and a 32% reduction in enforcement personnel. Meanwhile, the number of tax filers has increased, compounding the agency’s problems.
According to Rettig, the funding issues started years ago; for decades, IRS staffing increased at a rate relative to the country’s gross domestic product (GDP). However, this trend has reversed. While the GDP has increased by 76 per cent since 1995, IRS staffing has declined by 32 per cent overall.
These underfunding issues have been brought on by “corporate lobbyists and anti-tax extremists” who have pushed to cut IRS funding over the years, the lawmakers wrote. “Last year, Republican Senators were Initially, it was possible to include IRS funding in an early framework for the bipartisan Infrastructure Investment and Jobs Act, but quickly reversed course under pressure from corporate and conservative lobbyists.”
Reporting has foundCorporations and the wealthy have benefited from the cuts in IRS funding made by Republicans over the years. With less funding, the agency isn’t able to perform as many audits and often doesn’t have the resources to investigate the complex ways that the rich can hide their incomes from auditors. Republicans have pushed for the agency to go after taxpayers with low incomes in order catch fraud from the earned income credit.
The government has been able to dodge taxes thanks to tax dodgers $7 Trillion was missingYellen last year estimated that the IRS will lose as much as $1 trillion in revenue over the course a decade. Rettig estimates that the IRS misses out by as much $1 trillion annually.
“This right-wing crusade against the IRS is achieving its primary goal – decreasing U.S. government revenue and denying the IRS the resources it needs to identify and stop the complex tax evasion by the top 1 percent,” the lawmakers wrote.