The budget arrangement might encompass reductions in IRS funding, hindering efforts to intensify measures against affluent tax evaders.

 A potential congressional budget agreement may undermine the IRS's initiative to target affluent tax evaders. President Joe Biden allocated nearly $80 billion in additional funding to the IRS in the Inflation Reduction Act of 2022, with the purpose of collecting unpaid taxes from the wealthy and enhancing customer service.

However, in the latest bipartisan budget deal announced on Sunday, there is a provision to reduce the IRS funding by $20 billion in 2024, according to Politico. Congressional Republicans have advocated for these cuts, arguing that an increased audit campaign would negatively impact small businesses and regular citizens.

While Biden and then-House Speaker Kevin McCarthy had initially agreed to a $20 billion reduction last spring, the recent change in the weekend's deal is the frontloading of the cuts to this year rather than a phased approach over two years. The IRS aims to target tax evaders earning over $400,000 annually, corresponding to approximately the top 2% of American earners.


The impact on ordinary taxpayers might not be significant unless one supports more audits of the wealthy. Over the years, Congress has reduced the IRS budget, making it more challenging for the agency to audit taxpayers who do not fulfill their tax obligations.

Tax experts suggest that fewer audits will result from the decreased funding, making it harder for the IRS to pursue those with higher incomes. President Biden contends that the additional funds would enable the IRS to leverage up to $400 billion in unpaid taxes over a decade.

While some of the new funding is intended to enhance IRS technology, reduce wait times for callers, and expedite refund processing, these efforts have bipartisan support. Congressional Republicans seem focused on preventing increased audits of affluent Americans, arguing that such enforcement measures would negatively impact ordinary taxpayers.


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