There is a $1 trillion gap between what Americans owe in taxes and
what the federal government collects. The Democrat's budget bill
that is expected to win final approval in the House this week would
unleash fund that could help round up all that missing money. Congressional
correspondent Lisa Desjardin has more
Judy, the so called Inflation Reduction Act would dramatically increased
funding for the I R s some $80 billion over the next 10 years. Democrats
say that gets the agency back on its feet, able to find more tax
cheats. After years of budget cuts. Republicans say it's dangerous
and will target American families for audits. Joining me now to understand
more is former IRS Commissioner John Koskinen. Thank you so much
for joining us. I want to start with some baseline facts here about
the I R s first of all since 2010.
The IRS has seen significant budget cuts. Nearly 20% and their staff
numbers are down about that same amount the agency currently has
about 80,000 full time staffers for reference, John Koskinen. This
bill could double that amount, adding another 80,000 plus staffers
over 10 years. Does the IRS really need that many is the problem
that large
Well, I'm not sure how they came up with the 80,000 number of between
now and 2031. When the bill expires in the funding expires anywhere
from 35,000, as many as 50,000 employees were retired because they're
eligible to retire, so a lot of that will have to be replaced. But
in terms of the growth of the IRS, I always thought that if I could
get back to 20,000 that I lost while I was there
Ah, that would be a major step forward. What is the need? Then? What
are the budget cuts done? What did you see them doing? And what's
your understanding now of the agency. This funding is going to be
a sea change for the IRS. Obviously, it's a lot more fun to try to
figure out to spend money effectively than to deal with on going.
Budget cuts, which has been the situation for the last 10 or 12 years
won't be starting from scratch. It has a lot of plans in place to
improve taxpayer service to modernize its information technology
systems.
And to catch up in its enforcement. The audit rate is down by over
50%. So that means a lot of people who should be audited who are
cutting corners or even cheating are getting away with it because
there aren't enough revenue officers and revenue agents. Um, I think
basically, though the people are going to better motion this our
taxpayers. It's interesting because that's Republicans criticism.
They say that all of these new hires workers, especially the new
auditors,
Could target American families and I want to play one of the critics.
This was Senator Marco Rubio, speaking in the Senate Senate chamber
over the weekend. After them they're going to go after the people
that cannot afford to hire an army of lawyers and accountants to
fight off the IRS agents.
Thousands of I. R s agents were not police officers to go after criminals
I r s agents to go after American taxpayers. That's who they're gonna
go after. I promise you and I regret to say it that a lot of hard
working people are going to be getting letters in the mail saying,
Hey, we want to talk to you about your taxes from five years ago
from three years ago because we think you might have messed up. This
will mean more audits. Do we know who those audits are likely to
hit? How does the IRS approach who it chooses? Hardworking Americans
who Senator Rubio is worried about Senator Rubio.
Off base. It's really a silly argument to say that the IRS is not
going to go after hard working Americans.
The vast majority of taxpayers never hear from the IRS. They have
simple, straightforward returns with W twos and maybe a 10 99 thrown
in, and their I r s is goal is not to audit anybody where there is
not going to be a change. They keep track of what's called the no
change rate, and the goal is to keep that as minimal as possible,
because if there's no change in an audit
Not only is it a waste of the taxpayer's time, it's a waste of the
IRS time. So what will happen with iron it the information technology
modernization and it's increased ability to do data Analytics is
the IRS will be actually better able to target the people who really
should be audited. So I think the vast majority of taxpayers are
going to benefit by this.
Because the taxpayers level of taxpayer services going to increase
significantly. Part of this gets to the power of the office, which
you held. The IRS commissioner. The commissioner has said himself
the current commissioner, that they are going to hold that they are
going to be responsible for making sure that folks who are under
$400,000 will not see any increase in their audit rate. What's to
say another commissioner couldn't change that and and change and
decide who they want to target.
Well, you have to remember there are only two political appointees
in the I. R s commissioner and the chief counsel. Everyone else is
a dedicated career employee and I have a lot of confidence in them
and no one wants to waste time. And I'm chasing taxpayers who don't
owe more money than they've already paid so that I think it's fair
to say that the best majority of people earning under $400,000 already
While appropriate income taxes and never hear from the IRS. Those
were cheating are going to be a little more nervous. I've always
said that when you under fund the I R s. It's really a tax cut for
tax cheats because they're the ones who benefit by the lowered rate
of enforcements and the lower audit rates. So the I R s with this
funding is going to be able to be more focused on the people who
are actually noncompliance. Hardworking Americans who are filing
appropriate tax returns aren't going to hear anymore from the Irish
and the future than they've heard. In the past, Democrats are count.
You know, on this idea, expanded IRS enforcement to bring in hundreds
of billions of dollars. Do you think there is that much money out
there in tax cheats that the IRS can't get it now?
When I was there, looking at the audits that were selected to be
done that couldn't be done because we didn't have enough people.
My estimate was we were leaving 8 to $10 billion a year on the table.
That wasn't guessing that wasn't saying, Let's go find some people.
Those were people who had returns and had serious questions in them,
and we just didn't have enough revenue agents and officers. So I
think the revenue projected to be raised by this bill is reasonable,
and I think it's probably going to be exceeded. Over the course of
the eight years, John