How Republicans are aiming to 'protect tax cheaters' with new bill: report

04 January 2023

Amid the Republican battle over the next speaker of the House, Mother Jones Senior Editor Michael Mechanic shed light on another priority of the party — which is the possible enactment of the Family and Small Business Taxpayer Protection Act.

In his reporting, Mechanic asserted that the potential bill is a misnomer, because rather than protecting taxpayers — as the name implies — it would instead protect “tax cheaters” by rolling back IRS funding from the Inflation Reduction Act (IRA).

Americans for Tax Fairness founder Frank Clemente said in a recent press release, “The richest 1 percent avoid paying $160 billion a year that they owe in taxes due to inadequate tax enforcement. Republicans are voting to let them keep on cheating the rest of us.”

Mechanic reflected on his 2021 reporting around a similar IRS arrangement back in 2011. The agency’s budget was cut by over $2 billion at the time which resulted in a significant drop in non-filer investigations and an astronomical increase in outstanding tax debt by 2019.

In 2020, it was confirmed that almost 800,000 wealthy non-filers owed a hefty $46 billion collectively, and many of the cases were eventually dismissed without any accountability from the agency.

This is what the $80 billion allotted by the IRA was supposed to rectify. As of October 2022, the Congressional Research Service reported that over a span of 10 years, the funding would update the agency’s outdated systems and technologies, bolster operations support (such as rent, facility, security costs), expand and enhance taxpayer services (prefiling assistance and education), and “monitor and enforce taxes on digital assets such as cryptocurrency."

Then, GOP hardliners and allies of former President Donald Trump attempted to hijack that narrative across social media by claiming that the IRA would instead use the money to hire “87,000 new agents” who would track down “ordinary taxpayers."

Moreover, members of the party who are spewing that lie are not letting up on their desire to repeal 90 percent of the funding, which Americans for Tax Fairness said in its press release would take away plans to improve taxpayer services (for refunds, customer calls, etc.), fund US Tax Court to resolve cases between taxpayers and the agency, and also provide the IRS with enough resources to launch an easy and free, government e-filing system.

Mechanic noted that the GOP’s gesture of proposing anti-tax bills that benefit no one but the 1 percent is nothing new, and Tax Policy Center Senior Fellow Steve Rosenthal presumed that the issue of IRS funding will be “ongoing” in both Senate and House sessions for the foreseeable future.

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