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Biggest Unfairness Facing American Taxpayers is Lack of Customer Service at IRS

With millions of American taxpayers still unfairly waiting for long overdue refunds and tax returns amidst an ongoing backlog – and no plan by President Biden to address it – Ways and Means Republicans warned during an Oversight Subcommittee Hearing that the biggest unfairness facing taxpayers today is the lack of customer service at the IRS.

READ: Rice: $19 Billion in Improper EITC Payments at IRS — Let’s Fix Underlying Problems & Customer Service

Key Takeaways:

IRS officials and data don’t support Democrats’ claim that the IRS disproportionately targets low-income tax-payers.

  • Audits of lower-income taxpayers are a result of complex tax credits and administrative errors.
    • Vast majority of audits for lower-income taxpayers are for taxpayers claiming refundable tax credits – like the EITC – and is driven by the high error of those credits, which has consistently been around 25 percent.
  • IRS data shows wealthy people are audited at higher rates. 
    • IRS data shows taxpayers making over $1 million are audited at a higher rate than low-income earners and those making $10 million or more have the highest audit rate at the IRS for individual taxpayers.
    • During an Oversight Subcommittee Hearing in March 2022, even IRS Commissioner Charles Rettig said, “We audit high-income taxpayers more than any other category at the Internal Revenue Service.”
  • A supercharged IRS will make audits of all Americans more frequent.
    • President Biden’s plan to supercharge the IRS with $80 billion in mandatory funding and 87,000 new IRS agents will lead to drastically higher audit rates for all Americans at every income level, according to the Congressional Budget Office.

The IRS needs to deliver better customer service to American taxpayers.

  • Instead of addressing the backlog of millions of returns, the Biden Administration has been advocating for months to hire 80,000 new auditors to target tax cheats.
  • The IRS hasn’t even used the billions of dollars in COVID relief, yet Democrats are seeking even more funding for the agency.
  • Without action, millions of Americans will continue to have serious problems filing their taxes and will be unable to reach the IRS to get help.

READ: Burden of IRS Backlogs Falls on American Taxpayers

Ways and Means Republicans have been urging the IRS to help taxpayers and address the ongoing backlog.

  • January 2022: Top Republicans at the Ways and Means Committee and the  Appropriations Committee sent a letter to Commissioner Rettig requesting a plan on how the IRS would address the more than 16 million outstanding tax returns and asking why the agency hadn’t spent over $1 billion in funding.
  • December 2021: 99 House Republicans, including House Republican Leadership and all Ways and Means Republicans, urged Commissioner Rettig to provide information on how the agency plans to resolve its process and prepare for the upcoming 2022 tax filing season.

READ: Brady, Rice: At GOP’s Urging, IRS Agrees to Use Existing Funds to Fight Backlog

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