An internal Treasury memo that was released on Wednesday revealed that United States Treasury Secretary Janet Yellen has given the head of the Internal Revenue Service the directive to produce a detailed plan for deploying the recently enacted $80 billion in funding for enforcement within the next six months.
The operational plan, according to Yellen’s memo to IRS Commissioner Charles Rettig, which was accessed by Reuters, “should contain information on how resources will be spent over the ten-year timeframe on technology, service improvement, and staff.”
“This operational plan is key to ensuring that the public and Congress are able to hold the agency accountable as it pursues needed improvements,” she wrote. She went on to say that the plan needed to include metrics for areas of focus and targets for the agency to achieve in the coming years. “This operational plan is key to ensuring that the public and Congress are able to hold the agency accountable as it pursues needed improvements.”
The clause that would bring in an additional $80 billion in resources is an essential component of the $430 billion tax, climate, and prescription pharmaceuticals measure that was signed into law on Tuesday by President Joe Biden.
According to an estimate provided by the Congressional Budget Office, the addition of the new resources would lead to an increase of 204 billion dollars in tax revenues over the course of ten years as a result of greater tax compliance.
In a previous version of the bill, there was a provision that required the Internal Revenue Service to present a detailed expenditure plan within the first six months of the law’s implementation. However, this requirement was ultimately struck from the act. As a direct consequence of Yellen’s memo, the original deadline has been restored administratively.
She told Rettig that she was prepared to approve the near-term use of funds for improvements to next year’s tax filing season, but that the IRS plan was a “pre-requisite” for any broader use of funds by the agency. Yellen told Rettig that she was prepared to approve the near-term use of funds for improvements to next year’s tax filing season.
Yellen also reiterated her directive from the previous week, in which she stated that she did not want the investments made by the IRS to result in an increased risk of audits for small businesses or households with annual incomes of less than $400,000, in comparison to “historical levels.”
Read more:-
- The Democrats of Salt Have Given Up
- The Most Recent and Extraordinary Chapter in Trump’s Story Brings With It a Sense of Political Complication
- Wall Street Investors Are Relieved by Expectations of a Soft Landing for the US Economy
On the other hand, it is not clear which historical audit rates Yellen is aiming at. The Tax Policy Center in Washington, which is a think tank run by the Brookings Institution and the Urban Institute, reports that a decade of budget cuts slashed overall audit rates in 2019, bringing them down to 0.4% of individual tax returns from 1.1% in 2010. The COVID-19 pandemic further reduced those audit rates.
