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Hyperbolic GOP claims about IRS agents and audits

The GOP has focused its fire on provisions that would bolster the Internal Revenue Service with new funding to crack down on tax cheats. But these numbers are a misfire, lacking significant context. Years of congressional underfunding of the IRS has left the agency without the resources to quickly process returns, let alone assess the complex tax-avoidance strategies of well-heeled individuals. The IRS has about 82,000 employees — down from 90,000 in 2012 — but when all is said and done, the size of the agency should only grow 25 to 30 percent. About $46 billion of the funds is targeted for enforcement, but Treasury officials say a precise number of enforcement agents who would be hired is not known yet.

GOP staff applied 2010 audit rates to recent tax filing data, coming up with 1.2 billion new audits per year. The math adds up, but these numbers lack important context. People making less than $75,000 file more than half of tax returns, so the increase in audits amounts to just 0.6 percent. While the number of new audits for people reporting more than $5 million income seems small, that would represent an increase of nearly 15 percent. IRS Commissioner Charles Rettig says after the bill was approved, “audit scrutiny” would not be raised on small businesses or middle-income Americans. The CBO indicated that Swagel’s blog post was intended to place the effect on taxpayers in the September 2021 blog post into context.

The Biden administration is planning to hire 87,000 IRS employees over the next 10 years. Many will be replacing people who will retire soon. The numbers reflect a relatively small percentage increase for people making less than $75,000.