House GOP Pursues Fox-Inspired IRS Tax Enforcement Reduction

On Jun 7, 2024

TL/DR –

Fox News allegedly propagated a false claim over 200 times that the Inflation Reduction Act would result in the hiring of 87,000 new IRS agents. This claim has been refuted as the Act’s provisions include approximately $80 billion in additional funding over a decade, aimed at increasing tax enforcement efforts targeting individuals earning over $400,000 annually. Despite this, the Republican-led House Appropriations Committee introduced a bill proposing a $2 billion reduction in IRS enforcement funding, with certain Republicans supporting the false Fox News narrative and the reduction aimed at weakening tax enforcement.

Fox falsely claimed Inflation Reduction Act funding would result in 87k new IRS agents

During August 2022, while the Inflation Reduction Act (IRA) was progressing in Congress, Fox disseminated a false claim that this law would add 87,000 employees to the IRS. This misinformation continued to be peddled on Fox well into 2024, with claims that these imaginary agents were a threat to democracy.

Despite Fox’s falsities, the IRA effectively allocated around $80 billion for IRS funding over the next decade. This funding is aimed at enforcing stricter tax laws on Americans earning beyond $400,000, projected to raise $204 billion over 10 years. The claim of IRA being responsible for 87,000 IRS hires is untrue.

Republican House Appropriations Committee proposes $2 billion cut in IRS enforcement funding

A bill summary from the House Appropriations Committee suggested “reducing enforcement funding by $2.0 billion”. Over 90% of the GOP’s proposed IRS funding cuts are targeted at tax enforcement.

As The Hill reported, Republican opposition has already led to significant reductions in the IRS’s increased funding. Notably, Rep. Tom Cole (R-OK), the committee’s chairman, and Rep. David Joyce (R-OH) have openly supported Fox’s falsehood about 87,000 IRS hires, aiding the Republicans’ goal to weaken tax enforcement.

Additional IRS enforcement funding aimed at the wealthy proving highly successful

Before the IRA was enacted, Treasury Secretary Janet Yellen directed the IRS to use its new enforcement funding primarily for “high-end noncompliance”. CNBC reported that these funds have enabled the IRS to initiate several programs aimed at taxpayers with the most complex returns, leading to a recovery of over $480 million from tax-evading millionaires by February.

CNBC also reported that the Treasury Department estimates greater IRS enforcement will yield an additional $561 billion in tax revenue between 2024 and 2034.
The Associated Press revealed that according to IRS estimates, restoring previously cut enforcement funding could elevate revenues to as much as $851 billion over the next decade.
The IRS budget request for 2025 fiscal year showed that it collected $86 billion through enforcement programs in 2023, a return on investment (ROI) of about $7 to $1.
USA Today highlighted a study showing that auditing wealthy taxpayers could deliver a ROI of $12 for each dollar spent.
The IRS has warned that any cuts to its enforcement funding could adversely impact this revenue collection and exacerbate future deficits.
The right-leaning Committee for a Responsible Federal Budget cited an estimate from the Congressional Budget Office stating that for every $1 of rescinded IRS funding, the government would lose $2.50 of revenue.

—
Read More US Economic News