Congress mandated that the IRS involve themselves in making life easier for taxpayers through efforts like adding 80,000 additional agents, and how that's worked out for the public is ... a little shocking.
Damian Brady, vice president of research for the National Taxpayers Union Foundation, joined WWL's Newell Normand show where he revealed that as part of the changes, the IRS sought to audit 8% of the highest income earners and when that didn't garner the returns they expected, they moved on to auditing small business owners.
"They seem to be focusing, a lot more of their enforcement activities on businesses, small businesses and self-employed businesses. And they think that they can get more money, more and more juice from the squeeze of those of the job creators out there," Brady said.
63% of new audits opened in 2023 were aimed at those earning less than $400,000, he added, so despite the directive to increase enforcement across the board, they seem to be hitting only one segment of the population.
"The mindset behind this whole thing is that there are people that aren't paying their fair share ... So, of course, there are some people who are willfully evading or hiding some of their income and evading the amount of taxes that they owe. But there's also just a lot of confusion and complexity and different interpretations of some of these complex, tax laws and tax regulations that come from from Treasury," Brady said. "So, you know, a lot of times when the IRS does these audits and things go to tax court and end up getting litigated, it doesn't always go to the IRS' favor."
Instead of spending all of this money on auditors to add more enforcement against the American people, Brady suggests they use money to "upgrade their woefully out-of-date computer technology systems, their core database, the individual master file, the database of all taxpayers, that's still based on technology and computer coding from the early 1960s.
And now we're already a quarter of the way through the 21st century, and we're still operating on 1960s technology. So there's a lot of priorities that are being set aside while they're pursuing their enforcement. So if they were able to do that, that would lead to some administrative savings at the IRS because they would be able to have more cohesive and coherent databases and make it easier to serve taxpayers when they call in for assistance."
