That’ll Do It: Treasury Sec Yellen Asks IRS to Please Not Increase Audits on the Middle Class

Treasury Secretary Janet Yellen instructed the IRS on Wednesday not to use any new funding from the Democrats’ $740 billion social spending and taxation bill to increase audits on the middle class. 

“I direct that any additional resources—including any new personnel or auditors that are hired—shall not be used to increase the share of small business or households below the $400,000 threshold that are audited relative to historical levels,” Yellen wrote in a letter to IRS Commissioner Charles Rettig on Wednesday. 

Treasury Secretary Janet Yellen testifies before the House Ways and Means Committee. (AP Photo/Jose Luis Magana, File / AP Newsroom)

The bill passed by Senate Democrats over the weekend, dubbed the Inflation Reduction Act, will inject $80 billion into the IRS, allowing the agency to hire an additional 87,000 employees. 

Senate Democrats projected that the additional IRS manpower will increase federal revenue by $124 billion over the next decade. 

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While the new funding for the IRS is ostensibly for cracking down on rich households and corporations that evade taxes, some Americans are fearful that it will lead to an increase in audits for middle- and lower-income earners. 

A man enters the Internal Revenue Service (IRS) building in Washington, D.C., U.S. (Andrew Harrer/Bloomberg / Getty Images)

Yellen dismissed those worries in Wednesday’s letter, saying that enforcement measures will instead “focus on high-end noncompliance.”

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“For regular taxpayers … the result of this resource infusion will be a lower likelihood of audit by an agency that has the data and technological infrastructure in place to target enforcement resources where they belong—on the high end of the income distribution, where the top 1% alone is estimated to not be paying $160 billion in owed taxes each year,” Yellen wrote.

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