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Fact check: Will 87,000 new IRS agents mean more audits for middle-class families and small businesses?

Evan Santiago, The Charlotte Observer on

Published in Political News

The Schumer-Manchin tax bill passed the Senate as part of the Inflation Reduction Act on Sunday. According to legislative documents, the bill will raise taxes and boost the IRS by an estimated $80 billion.

The bill had been opposed by a number of Republican leaders before it was passed. However, Vice President Kamala Harris cast the tie-breaking vote and the bill now heads to the House.

Last week, The Republican National Committee claimed that the increased budget and its subsequent recruitment of nearly 87,000 IRS agents would lead to “poorer” Americans and small businesses being targeted with audits.

What will the budget increase be used for?

The IRS says the $80 billion boost will go towards operational upgrades, customer service updates, systems modernization, and “increased enforcement.” According to IRS Commissioner, Charles P. Rettig, the IRS will not increase the number of audits being performed on households earning less than $400,000.

“These resources are absolutely not about increasing audit scrutiny on small businesses or middle-income Americans,” Rettig wrote in a letter to Congress. “As we have been planning, our investment of these enforcement resources is designed around Treasury’s directive that audit rates will not rise relative to recent years for households making under $400,000.”

 

IRS size has historically fluctuated

According to data from the tax-collecting agency, the size of the IRS’ workforce has fluctuated throughout history. Although the size of the IRS has been on an upward incline since the 1960s, expenses have gotten larger and budgets have gotten smaller.

The IRS workforce first broke 100,000 employees in 1987 when operating costs were estimated to be around $4.4 billion, according to data from the IRS. The size of the IRS hadn’t dipped under 100,000 again until almost 24 years later in 2011 when budget cuts led to a depleted workforce.

Since 2010, Congress has reduced the agency’s budget by nearly 20%, according to the IRS’ Taxpayer Advocate Service. Last year, the IRS employed almost 79,000 people but has seen an increase in operating costs, now totaling upwards of $13 billion.

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