Yes, the IRS Has More Funding for Audits — but Americans Making Less Than $400K Aren't the Target

·3 min read
Janet Yellen
Janet Yellen

Alex Wong/Getty Treasury Secretary Janet Yellen

As Republican lawmakers lambast the Biden administration for a new plan that earmarks some $78 billion to the IRS over the next decade, the Department of Treasury is pushing back, saying that the funding won't be used to expand audits of households making less than $400,000 per year.

Recent criticism of the plan comes on the heels of Senate passing the landmark climate, health care and tax package known as the Inflation Reduction Act, which is expected to be signed into law by President Joe Biden after it is approved by the House this week.

The package sets aside roughly $78 billion for the IRS — an investment that a 2021 Treasury Department report estimated would enable the agency to hire about 87,000 employees and raise "$700 billion in additional tax revenue over the next decade."

Republicans have seized on the notion of 87,000 new hires, though as TIME notes, the report makes clear that those hires wouldn't all be IRS agents — and any new agents likely wouldn't target anyone other than those making $400,000 a year or more.

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A new statement from the Treasury Department clarifies that "these resources will be used only to address the shortfall in addressing tax avoidance by the wealthiest Americans and the biggest corporations," and that the funding was meant to help control inflation — which has impacted a wide swath of American families.

On Wednesday, Treasury Secretary Janet Yellen further detailed what the investment into the IRS would mean, via a letter to IRS Commissioner Charles Rettig.

"Specifically, 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.

Yellen's statement echoes the language of the bill itself, which specifically says the IRS funding  
is not "intended to increase taxes on any taxpayer or small business with a taxable income below $400,000."

But the assurances that those making $400,000 or less a year will not see an increase in the chances of getting audited haven't dissuaded many Republicans from claiming that the increased funding would be used to target everyday Americans.

Those include House Minority Leader Kevin McCarthy, who tweeted this week: "Democrats in Washington plan to hire an army of 87,000 IRS agents so they can audit more Americans like you."

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Other Republicans have tried to draw a line between the increased IRS funding and the recent FBI search of Donald Trump's Palm Beach, Fla., home.

"After todays raid on Mar A Lago what do you think the left plans to use those 87,000 new IRS agents for?" Sen. Marco Rubio tweeted.

In an interview with Fox News, Texas Rep. Kevin Brady also weighed in, saying, "There's simply so many more IRS agents that will be unleashed on the American public, and of course it's going to land on those Walmart shoppers and middle-class families."

Rettig himself clarified to lawmakers last week that "low- and middle-income taxpayers would not be the focus of increased enforcement action," adding that the investment would actually make it "less likely" that compliant taxpayers would be audited, due to "better technology and customer service."