Democrats finally passed their so-called Inflation Reduction Act (H.R.5376), and President Joe Biden signed the measure into law on August 16. Hoping to revive the president’s abysmal approval ratings, White House officials like Treasury Secretary Janet Yellen and Press Secretary Karine Jean-Pierre blitzed the media with seemingly false information, including the claims the IRS wouldn’t conduct new audits on anyone making less than $400,000 per year. However, the Congressional Budget Office (CBO) recently refuted that assertion.
On August 25, CBO Director Phillip Swagel responded to an earlier inquiry to Representatives Kevin Brady (R-TX) and Jason Smith (R-MO), the ranking members of the Ways and Means and Budget committees, respectively. Swagel’s letter provided requested information about increased enforcement efforts by the IRS due to the passage of H.R.5376.
Swagel readily conceded the IRS would collect billions in revenue for audits performed on individuals earning less than the $400,000 threshold presented by administration officials. He also explained that tax agents could use a variety of other methods of boosting revenue against the upper middle class by:
- Raising audit rates to “historical” levels
- Increasing “automatic screening and document matching”
- Supplementing funding for other “non-enforcement activities” to more accurately calculate individuals’ “tax liability.”
Perhaps most disturbing, Swagel explained that Democrats rejected a provision that would have barred the IRS from using any funding from their Inflation Reduction Act to audit taxpayers with taxable income less than $400K. By implication, Biden administration officials could weaponize tax agents to bombard working-class Americans with audits at any time.
