Top 1% dodges $ 163 billion in annual taxes, according to Treasury estimates

Top 1% dodges $ 163 billion in annual taxes, according to Treasury estimates

Signage outside the Internal Revenue Service (IRS) headquarters in Washington, DC

Bloomberg | Bloomberg | Getty Images

IRS Commissioner Charles Ratig wrote in a letter in August in response to questions from censors Elizabeth Warren, D-Mass, Bernie Sanders, I-VT and Sheldon Whitehouse, DRI, about the agency’s struggles.

“The risk inherent in the IRS’s current low levels of audit coverage is that taxpayers may be encouraged to take riskier tax positions, such as undercutting deductions, underestimating income and not -payment of what they owe. ”, Wrote Ratig.

According to the letter, the agency has already started reallocating its resources to focus on people with complex issues, such as high-income taxpayers, middle-income companies, international filers and more.

“Increased funding will allow the IRS to hire additional specialist review staff to increase audit coverage in these areas,” Ratig wrote.

A Syracuse University report found that the IRS audited less than 2 in 100 filers earning more than $ 1 million.

While audits have fallen across the board, according to the Treasury report, the review has fallen sharply for wealthy taxpayers claiming the earned income tax credit, compared to low- and middle-income filers.

In addition, Ratig said that more disclosures by banks, including basic information about customer deposits and withdrawals, could go a long way in closing the tax gap.

There is no reason why the final bill should not contain a strong proposition.

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Senior Director of Federal Tax Policy at the Center for Budget and Policy Priorities

“It is important for Congress to know that [the proposal] It has to be generalized, ”said Marr. “It takes money for people, computers and information.”

As lawmakers removed the measure from the infrastructure bill, there appears to be bipartisan support for an increase in staff and computers, Marr said.

But I think the bank reporting requirement really needs to be increased, he said.

Industry groups – such as the American Bankers Association, the Bank Policy Institute and the Consumer Bankers Association – have opposed the reporting requirements, citing concerns about cost, complexity and privacy.

Still, some political experts believe that the increase in IRS funding could be passed on to the so-called budget solution.

“I expect a strong continued push,” said Mara. “There is no reason why the final bill does not have a strong proposition.”

The Treasury Department estimates that $ 80 billion in IRS funding could bring in $ 316 billion from 2022 to 2031. However, the Congressional Budget Office has forecast $ 200 billion in new revenue over the same period.

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