Biden Pushes for a far more Powerful IRS on Taxes Day

It’s April 18, which means it’s tax day in America. 

President Joe Biden and the Treasury Department are marking the occasion by pushing Congress for additional IRS funding, which will make the agency even more powerful. 

“The IRS needs stable, long-term funding. $80 billion over the course of the next decade will finally give the IRS the capacity to modernize and invest in a 21st century workforce,” Counselor for Tax Policy and Implementation Natasha Sarin released in a statement Monday. “It will be a fairer and more equitable tax system, with the agency able to collect from top-earning evaders who currently skirt their responsibilities. And it will mean an IRS that is able to serve the American people the way that it wants to, and the way that they deserve. These changes will not happen overnight, but meaningful progress can be made swiftly—well in time for next Tax Day, and certainly those beyond.”

Sarin laments the IRS has too few workers and therefore, a backlog of tax return processing persists. She also claims the agency is “chronically underfunded” and “starving” of taxpayer dollars. 

“Today’s deadline is an inflection point in what has been the agency’s most challenging filing season in recent history. This is the byproduct of chronic underfunding that has starved the IRS of the tools it needs to serve the American people, coupled with a historic pandemic that introduced new responsibilities alongside mammoth challenges,” she continued. 

But a recent Government Accountability Office report found the IRS isn’t necessarily underfunded but instead, is very badly managed. 

“The Internal Revenue Service (IRS) experienced multiple challenges during the 2021 filing season as it struggled to respond to an unprecedented workload that included delivering COVID-19 relief. IRS began the filing season with a backlog of 8 million individual and business returns from the prior year that it processed alongside incoming returns. IRS reduced the backlog of prior year returns, but as of late December 2021, had about 10.5 million returns to process from 2021,” the report states. “Further, IRS suspended and reviewed 35 million returns with errors primarily due to new or modified tax credits. As a result, millions of taxpayers experienced long delays in receiving refunds. GAO found that some categories of errors occur each year; however, IRS does not assess the underlying causes of taxpayer errors on returns. Doing so could help reduce future errors, refund delays, and strains on IRS resources.”

“IRS has paid nearly $14 billion in refund interest in the last 7 fiscal years, with $3.3 billion paid in fiscal year 2021. Using IRS data, GAO identified some characteristics of refund interest payments, such as amended returns. However, IRS does not identify, monitor, and mitigate issues contributing to refund interest payments. Accordingly, IRS is missing an opportunity to reduce costs,” the report continues. 

Meanwhile, the federal government continues to take in record amounts of taxpayer dollars. 

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