We just don’t get it. This is exactly the system that Republicans want. Laws are for the peons.
Americans owe a cumulative $131 billion in unpaid taxes, enough to completely fund the Department of Education for two years. The bulk of that money is owed by the wealthiest people in the country, yet the IRS isn’t attempting to collect it from them. Instead, as IRS Commissioner Charles Rettig confirmed in a letter to Congress recently, the agency literally can’t afford to audit the rich, so it’s pursuing the poor instead.
ProPublica has published multiple stories on the sad state of the modern IRS over the past year. They found that a person is more likely to get audited if they make $20,000 a year than if they make $400,000. That’s because it takes a lot less time, money, and people to investigate someone who receives the earned income tax credit, one of the government’s largest anti-poverty programs, than it does to look into the complicated holdings and filings of someone else making 20 times as much. And even further up the economic ladder, things aren’t any better: Millionaires were 80 percent less likely to be audited in 2018 than they were in 2011.
This is the direct result of years of conservative-led efforts to successfully defund, defang, and delegitimize the IRS. Over the past eight years, Congress has steadily reduced the agency’s enforcement budget by billions of dollars, down 25 percent from what it was in 2008. And by cutting out only relatively small chunks at a time, the gutting has largely avoided public outcry. Unsurprisingly, according to ProPublica, the IRS is in disarray on the inside, resulting in “a bureaucracy on life support.”
On the one hand, the IRS said, auditing poor taxpayers is a lot easier: The agency uses relatively low-level employees to audit returns for low-income taxpayers who claim the earned income tax credit. The audits — of which there were about 380,000 last year, accounting for 39% of the total the IRS conducted — are done by mail and don’t take too much staff time, either. They are “the most efficient use of available IRS examination resources,” Rettig’s report says.
On the other hand, auditing the rich is hard. It takes senior auditors hours upon hours to complete an exam. What’s more, the letter says, “the rate of attrition is significantly higher among these more experienced examiners.” As a result, the budget cuts have hit this part of the IRS particularly hard.