In 2021, the Internal Revenue Service (IRS) will employ roughly 80,000 workers. This includes revenue officers and special agents who enforce tax laws and undertake criminal investigations, as well as a variety of administrative, clerical, and professional professions.
However, it is crucial to remember that this information is subject to change and may reflect something other than the most recent figures.
All about IRS Agents
IRS agents work for the Internal Revenue Service (IRS), the federal agency in charge of enforcing tax laws and collecting taxes in the United States. They may hold many employment designations, such as revenue officers, special agents, and criminal investigators.
Revenue officers are in charge of enforcing tax laws and collecting back taxes from people and corporations. Special agents are in charge of carrying out criminal investigations into tax evasion and other financial offences. Criminal investigators are responsible for looking into any criminal infractions of tax legislation.
Overall, IRS agents are critical in enforcing the nation’s tax laws and ensuring that people and corporations pay their fair share of taxes.
Funding for 87,000 IRS Agents
Following the election of Kevin McCarthy (R-Calif.) Speaker of the U.S. On January 7, Republican legislators in the House of Representatives repeated their threat to block IRS funding. This was followed by further discussion of the 87,000 IRS officers who could target middle-class taxpayers.
On the first day of House business in the new Congress, Republicans voted to revoke substantially (i.e., $72 billion) of the Inflation Reduction Act’s $80 billion in IRS funding. This is partly due to the endeavour to “repeal the 87,000 IRS agents” being part of the House Republicans’ Commitment to America agenda for the 118th Congress.
However, it is crucial to remember that the party-line vote to abolish IRS funding was primarily symbolic because the bill (the Family and Small Business Taxpayer Protection Act) will not pass the United States Senate. (The Congressional Budget Office predicts that the GOP IRS defunding bill would add nearly $114 billion to the deficit over ten years.)
What the IRS’s new $80 billion budget truly means for your taxes
The extra funds are designed to help close the “tax gap,” is the differential between what people pay as taxes and what they owe in taxes, estimated by the Treasury Department to be more than $600 billion per year. According to a Congressional Budget Office estimate, the increased funds might help the IRS generate nearly $200 billion in revenue over the next decade. However, the exact amount is difficult to calculate and needs to be clarified.
According to Natasha Sarin, a Treasury Department counsellor for tax policy and implementation, the likelihood of getting audited for Americans earning less than $400,000 per annum will remain the same from current levels.
Instead, according to Sarin, regular people should have a better experience paying their taxes because the cash will let the agency hire more employees. According to Treasury Department estimates, fewer than 15,000 people were available to answer roughly 200 million calls in the first half of 2021, or one person for every 13,000 calls.
“The only difference that average taxpayers, small companies, and low-income taxpayers will see is that there will be an IRS staff who can answer the phone when they call,” Sarin added.
According to a recent Government Accountability Office report, audit rates of individual income tax returns declined for all income levels between 2010 and 2019. Audit rates fell the most for taxpayers earning $200,000 or more.
According to the report, the audit rate for taxpayers earning between $25,000 and $200,000 in 2019 was 0.17 per cent. The audit rate for persons earning $5 million or more in the same year was 2.35 per cent.
The Actual Facts
We originally disputed McCarthy’s claim of “the Democrats’ new army of 87,000 IRS agents” in August, noting the figure was greatly inflated.
The amount was taken from a Treasury study produced in May 2021 about how the administration aimed to resolve the “tax gap” – the difference between what the government owes and what is paid. According to the impartial Joint Committee on Taxation, the discrepancy is estimated to be at least $381 billion yearly, with the majority of it attributable to underreporting income.
One key issue is that the IRS needs more experienced revenue agents to handle complex tax returns. The Government Accountability Office stated in a May report last year that audit rates for the wealthy have dropped considerably. According to the GAO, more than 21% of tax returns with more than $10 million in revenue were audited in 2010, and that figure had plummeted to 3.9 per cent by 2019.
A figure on page 16 of the Treasury report shows that over $80 billion in new resources over ten years would allow for hiring 86,852 full-time employees over the next decade.
The Biden administration has yet to develop a strategic plan for how the money would be used, but a little more than half is earmarked for enforcement. In other words, many would not be “agents” but employees employed to improve information technology and customer service.
The IRS employs approximately 79,000 people, down from approximately 95,000 in the fiscal year 2012. However, the new hires do not imply that the agency’s workforce will be doubled, as some Republicans asserted during the legislation’s discussion. The Congressional Budget Office forecasts that IRS staffing will continue to decline to around 60,000 in ten years without extra money. Therefore, the budget would allow a doubling from that base or a 50% increase from current levels.
The Bottom Line
The cash has recently become a political flashpoint among conservatives and some business groups, who wrongly claim that the IRS will use it to employ an “army” of 87,000 extra agents to target typical taxpayers.
All of those accusations, according to Treasury Department officials, are untrue. Officials from the Trump administration have stated again that they will concentrate their enforcement efforts on rich Americans and major organisations.
If you want any help, contact IRS Problems and make them disappear.