Republicans on the House Ways and Means Committee say they have received information from the nonpartisan scorekeeper at the Congressional Budget Office (CBO) challenging the Biden administration's narrative that Americans making less than $400,000 a year won't see higher IRS audit rates.
'Supercharged IRS' Coming for Middle-Income AmericansThis figure was arrived at by calculating how much less tax revenue would flow into government coffers if legislators had accepted amendment No. 5404 (pdf) proposed by Sen. Mike Crapo (R-Idaho) that explicitly called for none of the funds appropriated under the Inflation Reduction Act to be used to audit taxpayers earning less than $400,000 a year.
"The Congressional Budget Office (CBO) confirms that had this amendment passed and lower- and middle-income taxpayers been protected, revenue in Democrats’ bill would have been reduced by at least $20 billion," Committee Republicans said.
This confirms that "at least $20 billion of the $124 billion in new revenue expected by a supercharged IRS will be coming from higher audits on low- and middle-income Americans" and that this would be "in addition to existing audits on these income levels."
'Absolutely Not' Increasing Audit Scrutiny?Republicans said the CBO statement proves that members of the Biden administration are misleading the public by claiming that lower- and middle-income Americans won't face additional tax audits.
“This means that, contrary to the misinformation from opponents of this legislation, small business or households earning $400,000 per year or less will not see an increase in the chances that they are audited.”
More Audits 'Almost Certain'A previous CBO analysis indicated that, under basically the same funding plan as is featured in the Inflation Reduction Act, audit rates would be restored to levels around 10 years ago, and that audit rates would rise "for all taxpayers," though ones with higher incomes would face the biggest increase.
Despite Yellen's and Rettig's insistence that audit rates wouldn't jump for those making less than $400,000, Rachel Greszler, senior research fellow at the Grover M. Hermann Center, wrote in an op-ed for The Heritage Foundation that this likely isn't the case.
"Despite the Biden administration’s claims, it’s almost certain that households making less than $400,000 a year would face increased audits under Democrats’ bill," Greszler wrote.
"And despite estimates from official congressional scorekeepers that the Schumer-Manchin-Biden tax increase indeed would raise taxes on those Americans, the administration has doubled down on the claim."
"They’re real, hard-working American families. They are my constituents, they are my neighbors in my district. They’re living paycheck to paycheck, struggling with inflation and high gas prices," Brady said.
"They will be hit with over 700,000 new audits thanks to a skyrocketing surge in IRS agents."
"Higher taxes, harassing IRS audits on our Walmart shoppers, no relief from inflation—all as America battles a recession," he added.