Guest columnist Keith Peterson: Fact checking, sanity needed in discussion of IRS hiring
One of the provisions in the Inflation Reduction Act passed in August provides for increased funding of roughly $80 billion over a decade for the Internal Revenue Service. The headlines suggest the IRS is about to hire 87,000 new employees and this has become fodder for the midterm election campaign.
Rep. Troy Nehls, a Texas Republican, charged - falsely - that the IRS was recruiting a "shadow army to spy on your bank accounts" and Rep. Marjorie Taylor-Greene, a Georgia Republican, stated - falsely - that the IRS would soon have some 70,000 armed agents. Minority Leader Kevin McCarthy, a California Republican, vowed to repeal the extra funding for the IRS saying our job is "to work for you, not to go after you."
It is time for a little fact checking and sanity. First, the number 87,000 comes from a Treasury report that estimated that the IRS would need that many new hires over the next 10 years to replace retirees and other employees who depart. There is no specific number in the actual IRA on how much the IRS workforce might grow.
The IRS's actual enforcement division, that includes 2,100 armed agents, is facing large reductions because more than half are eligible for retirement. The IRS is trying to hire 300 more right now.
In 1992, the IRS had 117,000 employees. Today it is about 80,000, though the country's population has increased by 30 percent. Anyone who has tried to call the IRS during tax season knows that it needs more customer service personnel and each change in the tax laws passed by the Congress raises the number of calls the IRS must handle.
As for audits, in 1960 about three percent of all tax returns were audited. Today, that number is less than one percent. As a result, it is estimated that there is a $600 billion annual gap between what is owed in taxes and what the Treasury takes in. That $600 billion would cut our deficit in half.
The Congressional Budget Office estimated that the increased personnel and improved data systems paid for by the IRA could capture just over $200 billion in owed taxes, a small dent in the tax avoidance gap. The IRS has said that its increased enforcement efforts will go after high earners, large corporations and complex partnerships.
Several thoughts come to mind. First, the rhetoric by some politicians - given the current climate in the country - is dangerous and more than irresponsible. The IRS Inspector General has just issued a report that the number of threats against IRS employees has increased rapidly in recent weeks. Now the IRS is spending scarce resources to beef up security, and it is not exactly the kind of thing you want out there when you are trying to hire new employees.
Second, our tax system - or any tax system - works when we believe that everyone is paying his fair share. Billionaire Warren Buffett made the point when he said that his secretary should not have to pay a higher tax rate than he does.
Third, the Congress writes the tax code - though too often it is lobbyists who write provisions of the tax code to favor their particular industry. Everyone seems to agree that the 6,871 pages in our federal tax code is nuts. But then the Congress just amends or passes new provisions. And Americans spend billions of dollars on tax preparation.
Bashing the IRS for political gain is an easy if irresponsible trope. Now, it is entwined with all the "deep state" nonsense that infects social media. What the Congress needs is a "shadow army" of reformers to make the tax code fairer, simpler, and more efficient.
• Keith Peterson, of Lake Barrington, served 29 years as a press and cultural officer for the United States Information Agency and Department of State. He was chief editorial writer of the Daily Herald 1984-86.