The vast majority of American small business owners are concerned about an expanded IRS, according to survey results from the Job Creators Network Foundation exclusively provided to The Daily Wire.
The Inflation Reduction Act, signed into law by President Joe Biden two months ago, allocated $80 billion for officials to hire up to 87,000 new IRS employees over the next decade, thereby more than doubling the agency’s size. A poll of 500 small business owners conducted by the Job Creators Network Foundation, a nonprofit organization devoted to promoting economic freedom, discovered that roughly 70% oppose doubling the size of the agency.
“No one likes getting audited by the IRS, especially those who can’t afford to fight it,” Job Creators Network Foundation President Elaine Parker said in a statement provided to The Daily Wire. “The easiest audit for the IRS is one without a fight, where they send out a letter and squeeze more money out of those who won’t challenge them. Why else do you think the IRS audits the poor at five times the rate of everyone else?”
While correspondence audits involve the IRS sending a request for the provision of more tax information, field audits are more extensive. The former is less costly for the IRS, yet the latter tends to yield more revenue, especially for higher earners. As of 2019, only 11% of correspondence audits resulted in the IRS concluding that the taxpayer had accurately covered their liability, according to data from the agency.
“The tax code is already convoluted and intentionally difficult to navigate. For small businesses, it is even more so,” Parker continued. “Big businesses can afford high-priced accountants to navigate the complex system, but many small businesses handle their taxes themselves. If an audit comes, they’ll be woefully unprepared. The simplest move is to just pay up rather than engage in a time-consuming fight they’re unlikely to win. More IRS agents will mean more audits, more audits mean more targeting of small businesses and poor Americans.”
Officials in the Biden administration have nevertheless vowed that the expansion of the IRS would not translate to more audits for lower-class and middle-income taxpayers. Treasury Secretary Janet Yellen, for instance, promised that new funding would not be directed to increase audits for American households earning less than $400,000 per year “relative to historical levels.” However, she failed to clarify that “historical levels” of audits were far higher as recently as one decade ago. According to a report from the Government Accountability Office, audit rates for Americans earning between $25,000 and $200,000 fell 76% between 2010 and 2019, while those earning less than $25,000 saw audit rates fall by 61%.
“A strong IRS is critical to the economic success of this country,” she commented during a recent speech in Maryland, “and I am heartened that we are finally reflecting that in our funding decisions.”
IRS Commissioner Charles Rettig likewise sought to ease lawmakers’ concerns regarding heightened tax burdens. “As an extremely proud American, I’m grateful for your support of the IRS and our dedicated employees,” he said in a letter. “I cannot be forceful enough in emphasizing that these resources will be transformative for the agency and for American taxpayers.”
