Fact check: GOP leader says IRS agents plan 'new audits for Americans who earn less than $75k'
House GOP leader Kevin McCarthy tweeted: "Democrats' new army of 87,000 IRS agents will be coming for you -- with 710,000 new audits for Americans who earn less than $75k." PolitiFact checks his claim.
Posted — UpdatedHouse GOP leader Kevin McCarthy, along with many other Republicans, say otherwise.
"Democrats' new army of 87,000 IRS agents will be coming for you — with 710,000 new audits for Americans who earn less than $75k," McCarthy tweeted Aug. 9.
McCarthy’s office didn’t get back to us to explain where he got his numbers, but they are misleading.
No army of 87,000 agents
But even in the 2021 plan, not all of the hires would be auditors, or work in enforcement. The report said the money would go toward many things, including "hiring new specialized enforcement staff, modernizing antiquated information technology, and investing in meaningful taxpayer service."
Although the agency’s staff would increase, it’s key to note that over half of the IRS workforce is close to retirement. The plan was created with that exodus in mind and aims to hire thousands of people to simply maintain current levels. Today, the IRS has about 80,000 employees.
"The IRS will lose about 50,000 people over the next five or six years," said Natasha Sarin, Treasury’s counselor for tax policy and implementation. "A lot of this hiring is about replacing those people."
So, the 87,000 wasn’t exclusively for people on the enforcement side, and it wasn’t all going to boost the overall size of the IRS workforce.
Not 710,000 new audits
Brady took the audit rates of 2010 and applied them to the number of tax returns in 2018 — broken down by income groups. Using his approach, there would be about 710,000 more audits for filers reporting less than $75,000 in income.
But the approach ignores several key details about what the CBO report says in full and what the bill — and the Treasury — have made clear: This effort is intended to increase audits of corporations and high net-worth individuals.
The full sentence in the CBO report that Brady was drawing from said the audit "rate would rise for all taxpayers, but higher-income taxpayers would face the largest increase." Brady took a broad statement and applied it across the board to all income groups.
Sarin also noted that some of the people who report little or no income are high-income earners who have gamed the system to drive their tax bill as close to zero as possible.
"I direct that any additional resources — including any new personnel or auditors that are hired — 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," Yellen wrote Aug. 10.
Audit rates for filers reporting less than $75,000 have held steady over the past several years at about 0.4%. In contrast, in 2011, the audit rate was more than double at 1%.
Yellen said enforcement will focus on corporations and people with high net-worth. Auditing them requires staff with special skills. Today, she said, the agency is only able to audit about 7,500 out of 4 million such returns each year.
PolitiFact ruling
McCarthy said an "army of 87,000 IRS agents will be coming for you — with 710,000 new audits for Americans who earn less than $75k."
The IRS has indicated it plans to increase its staffing and enforcement. But the 87,000 figure is flawed because not all of those employees would work in IRS enforcement, and not all of them would be new workers added to the overall workforce. Some hires would maintain staffing levels that would have fallen if past trends of budget cuts continued.
The 710,000 audit estimate runs counter to the stated policy of the IRS and is based on a flawed use of a CBO estimate that assumed much higher spending on enforcement than is in the current Democratic bill.
We rate this claim Mostly False.
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