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April 28, 2021

Biden calls for increasing the IRS’s budget by 67%. Can more rigorous tax collection really raise $700 billion?
By Chris Matthews

While this may sound like a perennial political pledge — to pay for proposals by cutting “waste, fraud and abuse” — many observers of the U.S. tax system argue that the IRS has been underfunded for years and that spending more on enforcement can yield significant returns on investment. “Our analysis of IRS data show the enormous impact of budget cuts at the agency,” wrote Susan Long, director of the Transactional Records Access Clearinghouse at Syracuse University, in an email. “The IRS is recovering only a fraction of the unpaid taxes it recovered less than a decade ago, even though there are more millionaires than ever.” According to the Congressional Budget Office, appropriations to the IRS have fallen by about 20% between 2010 and 2020, when adjusting for inflation, and that has led to the number of IRS revenue agents being cut from 14,749 in in 2010 to 8,350 last year. These cuts have resulted in number of millionaires being audited by the IRS falling 72% during that time, according to an analysis published Tuesday by TRAC.

Transactional Records Access Clearinghouse, Syracuse University
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