Is an Army of Auditors Coming for You?

Many would have you believe that President Biden is about to unleash 87,000 new Internal Revenue Service (IRS) agents to target the wealthy and audit their tax returns.

The truth is more nuanced. Last year’s federal Inflation Reduction Act included nearly $80 billion of additional funding for the IRS over the next 10 years. The funding is expected to pay for itself by increasing tax collections by about $180 billion through 2031.

This has led to a lot of discomfort among taxpayers who worry about additional scrutiny. But in the words of NFL quarterback Aaron Rodgers: “Five letters here just for everybody out there … R-E-L-A-X. Relax. We’re going to be OK.”

Yes, the IRS plans to hire 87,000 new employees over the next decade. But according to former IRS Commissioner Charles Rettig, most of those hires will be people who answer the phones, work on processing individual tax returns or go after high-end taxpayers and corporations who are evading taxes. In addition, the new hirings will likely be offset by at least 50,000 retirements in coming years.

Over the past two years, the IRS has allowed about 400,000 unprocessed tax returns to pile up. Hopefully, the IRS will put the additional funding to good use and the result will be meaningful service improvements.

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