President Biden and congressional Democrats want to significantly increase the size and reach of the Internal Revenue Service. They say this expansion is necessary to ensure that big corporations and the wealthiest Americans “pay their fair share” of income and other taxes.
The president and the Dems assure us this expansion of the IRS will not affect the middle class or small businesses. Yet as more details regarding the expansion become public, we now know such claims are absolutely false. What else is new?
Today, I’ll pull the curtains back so you can see how Biden’s IRS plans will hurt the middle class, small businesses and the economy in general. Let’s start with what Biden and the Dems want to do to expand the IRS just ahead.
If Biden and the Democrats have their way, the IRS will double in size with $80 billion in new funding and 87,000 new agents. The agency would receive $45 billion earmarked for “enforcement activity” alone which will fund 1.2 million more IRS audits each year — about half of which will hit households making less than $75,000.
So much for hitting only big corporations and wealthy Americans. If the proposed expansion happens, this will give the agency unprecedented reach into the lives of families and businesses to harass and audit millions more taxpayers.
Already, the Biden administration has increased tax complexity for any self-employed American or those working as independent contractors or freelancers. This new requirement was passed into law through Biden’s $1.9 trillion COVID-19 relief package last March and reduced the threshold at which taxpayers had to file a 1099-K form from $20,000 in payments and 200 transactions to just $600 in total transactions.
This is a significant paperwork burden for Americans who earn money through these arrangements as well third-party processors. This will impact sharing economy (peer-to-peer) workers, like Uber and Lyft drivers and workers in numerous professions like writers, musicians, photographers, tutors and journalists just to name a few.
But wait… it gets even worse.
The Biden administration also wants to have the IRS track the deposits and withdrawals of any bank account, investment account, and Venmo, Paypal, and CashApp if the account exceeds $600 in total transactions.
This proposal has been described as a “comprehensive financial account information reporting regime” and would allow the IRS to snoop on virtually every American.
In fact, according to an analysis by the Joint Committee on Taxation, this proposal would hit an estimated 87 million Americans earning less than $400,000 per year and could hit up to 134 million Americans under this income threshold.
It would also violate taxpayer privacy and open taxpayers up to IRS harassment and abuse. This is not hypothetical — the IRS has violated similar reporting requirements to target taxpayers. According to a 2017 report by the US Treasury Inspector General for Tax Administration (TIGTA), the IRS regularly violated taxpayers’ rights and skirted or ignored due process requirements when investigating taxpayers for allegedly violating existing $10,000 currency transaction reporting requirements which exist under the Bank Secrecy Act.
TIGTA found that most of these investigations were fishing expeditions — just 8% of taxpayers investigated were found to have broken the law. Agents often failed to properly identify themselves, seized financial assets before ever having talked or consulted with investigated taxpayers and didn’t attempt to verify reasonable explanations investigated taxpayers offered.
And that’s not all… there’s even more.
This is not the only way Democrats want to monitor Americans — they also want to have the IRS study and implement a new government tax preparation system. This is just another way the left wants to consolidate and expand the power of the federal government. They would replace the existing system of voluntary tax compliance, where Americans are responsible for filling out their own tax returns — with a system where the federal government assesses and files taxes for Americans.
This would create a strong conflict of interest as the government would have an incentive to overcharge and/or withhold information from taxpayers. It would also empower the IRS to collect even more personal information from taxpayers.
And in the worst invasion of privacy in all of this, the IRS initially wanted a new face-scanning verification system requiring some taxpayers to submit biometric data (photo-ID) from their phone or computer in order to access online accounts.
This would be the ultimate clear violation of privacy and should be alarming to virtually all Americans, especially given the IRS has proven it cannot keep taxpayer data safe. Just last year, ProPublica (a non-profit news organization based in New York City) announced it had received the private tax returns of thousands of taxpayers covering 15 years.
Not surprisingly, there was widespread criticism of this latest IRS proposal from both sides of the isle and on Monday, the IRS announced it is abandoning the idea. Good!
What, you haven’t heard about Biden’s plans for greatly expanding the size and reach of the IRS? The media has remained mum on the new proposals. Surprise, surprise! At least you know about it now.
The good news is, I think the chances of the Biden administration getting much, if any, of these controversial proposals passed are now slim to none. There were critics on both sides of the aisle in Washington when it was rolled out. But that doesn’t mean they won’t stop trying.
Finally, and just for fun, here’s an article which argues you should be rooting for the LA Rams in the Super Bowl on Sunday — IF you are long stocks:
Personally, I’m pulling for Joe Burrow and the Bengals, even though they are the underdog.
In response to Biden’s plan of unfettered IRS snooping as a way to make big-money taxpayers pay their fair share, I would like to point out a few things that many supporters of his plan don’t realize:
1. The IRS is required to do at least a summary audit of any taxpayers earning over $1 million a year;
2. The IRS has an on-duty agent inside the corporate offices of many businesses if they report large earnings (the threshold varies, but it starts near $5 million);
3. Businesses that are audited and have a result that shows an under-reporting of income are subject to having their next two years’ returns given priority examination status.
So I ask: Where does he expect to get the extra income to cover the cost of this program?
If the “new” IRS goes after Biden, Pelosi, Schumer, Feinstein, Hillary, Bernie, Obama, the squad, Sharpton, Kamala, Maxine Waters, et al. as diligently as they threaten to go after the ordinary tax payers… That is a delicious fantasy, but it is not real… The real punishment should be imposed upon the perverts who have concocted such a destructive nightmare to impose upon a once free society. The idea that corporations do not pay their fair share is just another myth created by the Left, to create yet another phantom for the govt to chase, to cover up the fact that the govt is overspending its tax base and they need somebody else to blame to cover up their own criminal mismanagement.