Treasury's Yellen: 'Strong IRS Is Critical To The Economic Success Of This Country'

Treasury's Yellen: 'Strong IRS Is Critical To The Economic Success Of This Country'

Treasury Secretary Janet Yellen is defending Democrats’ push to add tens of thousands of IRS agents and staff in the coming years as “critical” to America’s “success.”

Yellen, addressing the $80 billion in new funding for the Internal Revenue Service that was part of the misnamed “Inflation Reduction Act” recently passed, said during a Thursday speech at the New Carrollton Federal Building in Maryland that “adequately funding the IRS is core to our success.”

The hiring binge will nearly double the size of the IRS if all 87,000 new hires are completed.

In her speech, Yellen essentially admitted that the focus of the hiring spree would be to collect more revenue from American earners and businesses.

“It raises the revenue for us to make important investments in our economic strength,” she said. “It makes sure that all Americans are playing by the same rules. It avoids misallocation of resources in the economy at large. And it does so by deterring taxpayers from shifting their activities toward more opaque sources or engaging in tax evasion.”

She repeated an earlier pledge that the increase in funding won’t go to boost audits of U.S. households earning less than $400,000 per year, but qualified that by adding “relative to historical levels.” She did not clarify what “historical levels” of audits have been recent, though they were much higher as recently as a decade ago, The Daily Wire reported.

A Government Accountability Office (GAO) report noted that audit rates for earners bringing home between $25,000 and $200,000 were off by 76 percent between 2010 and 2019. Those earning less than $25,000 saw their audit rates dip 61 percent.

“In all, a strong IRS is critical to the economic success of this country — and I am heartened that we are finally reflecting that in our funding decisions,” Yellen noted in her speech.

According to a Congressional Budget Office (CBO) report based on a previous proposal to hire 87,000 new IRS staffers noted that audit rates “would rise for all taxpayers,” though ti would impact higher-income earners more. But GOP members of the House Ways and Means Committee say that the new agents added to the IRS would be able to conduct 1.2 million more individual audits each year, with half of them directed at Americans earning less than $75,000.

Yellen went on to address the fact that on average, it takes Americans 13 hours to file a tax return, noting that new resources contained in the funding hike will be used to decrease wait times and bolster access to IRS services and help centers.

“By next year, every single center will be fully staffed,” she said. “As a result, we will triple the number of Americans served at these centers.”

She also repeated a favorite Democratic talking point, that the IRS needs to make “sure that everyone pays their fair share.”


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