IRS Expansion: Do The Numbers Add Up?

[ICU 812]

Between High School and College, I took algebra three times, so I am not that good with numbers. But this morning I got to counting on my fingers and came up with a question or two about the proposed expansion of the IRS.

Looks like they want 87,000 new agents and think that they will cost 80 billion dollars to fund them. There are, I have read, about 400,000 folks who earn over $400,000 a year, and maybe a hundred billionaires in total in the USA.

So then, to break even on this IRS expansion, each new agent will have to find around a hundred-million dollars of new collectable taxes just to cover their own position. Going back over the number of high-end taxpayers above, I don't think there is that much money out there to be taxed.

Did I drop a decimal point, or do I have that anywhere near right?

[Tiny]

80 billion divided by 87,000 is a little less than $1 million per agent.

But that's scary. If you have 87,000 agents going after 400,000 people, that's one agent for every 4.6 people. So if you make over $400,000 a year, one agent will spend about 20% of his time looking at your stuff.

I've been through a couple of audits. The IRS didn't collect anything, but I'd guess for every hour the IRS agent spent on my returns, I had to spend 10 hours putting info together to comply with his requests.

If that holds true, then I guess I'll be spending 4,000 hours a year on my taxes, or double what I now spend working 8 hours a day, 50 weeks a year. In fact, I won't have any time to work any longer. So I won't make any money. And they'll stop auditing me because I'll be below $400,000! It's great how these things have a way of working out!

[1blackman1]

The 87,000 agents is over the next 10 years. That isn’t just for hiring agents but also to replace agents lost through attrition. It’s also not just auditors but collections agents and enforcement agents. I presume (though I’m not sure) some of these Will be needed due to the complexity of the tax returns for millionaires and billionaires. A single agent likely can’t audit taxes of very creative accountants so it’ll take multiple agents.

I’ve been audited personally and have had businesses audited and usually their were multiple agents involved, specifically on the business side due to the complexity of multiple intertwined businesses and business interests.

Now personally as someone that from time to time might have to deal with these new agents I would have preferred that part be removed but such is life.

[nevergaveitathought]

Originally Posted by Tiny

80 billion divided by 87,000 is a little less than $1 million per agent.

But that's scary. If you have 87,000 agents going after 400,000 people, that's one agent for every 4.6 people. So if you make over $400,000 a year, one agent will spend about 20% of his time looking at your stuff.

I've been through a couple of audits. The IRS didn't collect anything, but I'd guess for every hour the IRS agent spent on my returns, I had to spend 10 hours putting info together to comply with his requests.

If that holds true, then I guess I'll be spending 4,000 hours a year on my taxes, or double what I now spend working 8 hours a day, 50 weeks a year. In fact, I won't have any time to work any longer. So I won't make any money. And they'll stop auditing me because I'll be below $400,000! It's great how these things have a way of working out!

what the agents are for:

billionaires are set, they dont cheat on taxes, the only place to hit them is in a law change that targets them

salaried people above $400,000 have no where to turn when it comes to taxes, their tax is what their tax is

of course there are the large corporations but anything there is a battle against experts

the two places the agents are for are:

1. small business- things like proving vehicle use with logs, or documenting business meals, or there might be a bundled cell phone plan and your daughter might have one- they want to hit people who are too busy and too tired from working all day to do all the nit picking logs and documentation and they cant "prove" everything so the deduction is denied. there are also more esoteric things like is the rental home (s) you have really akin to a business to allow you to claim the qualified income business deduction? of course there are out and out tax cheats but everyone gets dragged in the net

2. poor people - some of whom do work off the books where earned income credits depend on earnings amounts or child care credit amounts etc. I have read that, i think it was georgia, some county there, a majority black county, had the greatest percentage of audits by the irs, dont recall the time frame

[ICU 812]

Most everyone says they are talking about auditing agents, as in accounting guys. Is that really so?

What part of that 80 billion will go towards the law enforcement arm of the IRS? It has been reliably reported for several years now that the IRS has several thousand guns and 500 million rounds of ammo . . What does the IRS need with all that ordinance? How much more will they get out of this expansion money?

[nevergaveitathought]

oh and paypal and venmo transactions, something i know nothing about

they want to dig into that

didnt the leftists want to be able to sit at a screen, look into your bank account to see every transaction of $600 or more?

[1blackman1]

Originally Posted by ICU 812

Most everyone says they are talking about auditing agents, as in accounting guys. Is that really so?

What part of that 80 billion will go towards the law enforcement arm of the IRS? It has been reliably reported for several years now that the IRS has several thousand guns and 500 million rounds of ammo . . What does the IRS need with all that ordinance? How much more will they get out of this expansion money?

Enforcement agents will likely be included as well. As for guns and ammo, enforcement agents are trained like all federal police. Similarly to the FBI. They carry sidearms like most police.

I suspect your half billion rounds like everything else is hyperbole from some nutwing I mean rightwing blog pretending to be informative news.

[nevergaveitathought]

i think the republicans put forth an amendment during the senate debate on this bill

that the new auditors can only be used on those making $400,000 or more and

of course, it was voted down

sort of indicates where the money is expected to come from to make money on the auditors

small business and the poor,

of course biden claims he isnt raising taxes on anyone making less than $400,000

[1blackman1]

The reason it was voted down was because the language of the amendment didn’t allow investigations or audits into people or businesses that lowered their tax income below 400K through questionable deductions. However, the ITS gets no real benefit from auditing the poor and middle class because they usually don’t use itemized deductions aside from the easily verifiable home deduction.

Yes small businesses can end up audited but usually it’s a result of excessive deductions resulting in the business having a loss or being near a loss so they don’t pay taxes on their income.

[nevergaveitathought]

its not itemized deductions that get the poor audited

you're way behind

that used to be one an area of abuse but the last 4 years, no

its the free stuff and refundable credits and dependent claims

[Jackie S]

Just remember.
In the criminal Justice system, you are innocent until proven guilty.
With the IRS, you are guilty until you can prove yourself innocent.

I have always been brutally honest with my taxes. But I do have friends that have gone through what can best be described as a nightmare.

98 % of my income is W-2 income and my rather large SS check. I short form, as I simply do not have enough deductions to do the itemize thing. They take 25% of my SS up to 85%.

Last year, my income tax was $123,000. So you can guess I am in that $400,000 group.

With a lot of independent business’s, especially those related to some type of construction, the single biggest pitfall is the “contract labor” thing and claiming deductions for personal items, saying they are business related.

My advice. Just don’t do it.