The IRS isn't putting its money where its mouth is after the agency pledged to improve customer service for taxpayers following an infusion of cash. Of the $80 billion windfall the IRS will rake in from the Inflation Reduction Act, only 3.2 billion will be spent on improving taxpayer service.
The emphasis on improved customer service comes as the White House and Democrats face backlash over worries the IRS will end up targeting working-class families and small businesses as part of their efforts to raise revenue.
- The $3.2 billion appropriated to helping taxpayers wade through the complicated tax code is unlikely to keep pace with the massive increase in audits.
Janet Yellen has acknowledged the new and improved IRS could ramp up collections from middle-class taxpayers
- In a letter to the IRS commissioner last week, Yellen directed "any additional resources... 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."
- The IRS will have to target small and medium businesses because they won't fight back
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