Build Back Better became the Inflation Reduction Act: new name, same waste. As previously reported by The Drill Down, the new Manchin-Schumer monster aims to add 87,000 new IRS employees —doubling the size of the agency —with a fat $80 billion dollar cash injection.
This is certainly money that could be better spent elsewhere. Reports from the Treasury Inspector General for Tax Administration (Tigta) paint an incompetent picture of the IRS.
“Consider the agency’s chronic mishandling of tax credits,” Wall Street Journal reports. “By the IRS’s own admission, some $19 billion—or 28%—of earned-income tax credit payments in fiscal 2021 were ‘improper.’ The amount hasn’t improved despite years of IRS promises to do better.”
More Tigta discoveries that should have every American concerned (from The WSJ)::
A January Tigta audit found that an estimated 67,000 claims—totaling $15.6 billion—for the low-income housing tax credit from 2015 to 2019 “lacked or did not match supporting documentation due to potential reporting errors or noncompliance.”
A May audit found that 26% ($1.9 billion) of its American opportunity tax credits for education expenses were improper in fiscal 2021, and 27% ($541 million) of its net premium tax credits (ObamaCare) were improper in fiscal 2019 (the most recent year it estimated).
How did it handle $1,200 stimulus checks, the sick and paid family leave credit, or the employee retention tax credit? Unknown, since the agency didn’t estimate failure rates—for which Tigta rapped its knuckles.
A September 2021 audit found the IRS in 2020 issued 89,338 notices to taxpayers insisting that “balances were owed even though the taxes were not actually due.” Why? Because the feds had extended the filing deadline amid Covid but the IRS apparently didn’t notice.
In fact, according to Tigta, the IRS is only good at punishing people who resist its demands. According to The Wall Street Journal, “A March audit chastised the IRS for using lien foreclosure suits to confiscate ‘principal residences’ from delinquent taxpayers, a process that does ‘not provide [taxpayers] the same legal protections as seizures.’”
Great —let’s hand $80 billion to an agency that’s only good quality is harassing Americans. Secretary Janet Yellen, in a memo to IRS commissioner Charles Rettig, explained her hopes for the IRS in the wake of the passing of the Inflation Reduction Act.
“The Inflation Reduction Act provides the IRS what it has needed for years — a stable stream of mandatory funding that will allow the agency to serve American taxpayers the way they deserve,” Yellen wrote in a memo to Rettig.
Maybe we deserve better than the IRS. Period.
