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U.S. IRS 'under siege', Yellen says, needs $80 billion to beef up tax work

Economic Indicators Jun 07, 2022 04:38PM ET
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2/2 © Reuters. FILE PHOTO: U.S. Treasury Secretary Janet Yellen looks on during a U.S. House Committee on Financial Services hearing on the Annual Report of the Financial Stability Oversight Council, on Capitol Hill in Washington, DC, U.S. May 12, 2022. Graeme Jennings/ 2/2

By Andrea Shalal

WASHINGTON (Reuters) -U.S. Treasury Secretary Janet Yellen on Tuesday urged Congress to approve $80 billion in funding for the Internal Revenue Service to help the agency reduce a huge backlog of tax returns and allow it to go after $600 billion in unpaid tax bills.

"The IRS is under siege. It is suffering from huge underinvestment," Yellen told a Senate Finance Committee hearing on Treasury's budget request for fiscal 2023.

Yellen said the agency was dealing with massive problems, including a "huge backlog" in working through tax returns, and lacked the personnel needed to carry out complicated audits of higher-earning taxpayers.

As of May 27, the IRS had 10.2 million unprocessed individual returns, including 8.2 million paper returns waiting to be reviewed and processed, according to IRS.gov.

Senator Robert Casey, a Democrat, said the IRS had all but stopped auditing tax returns of wealthy private business owners, who were eligible for a 20% tax write-off on their personal taxes, while lower-earning recipients of the Earned Income Tax Credit (EITC) were five times more likely to be audited.

Yellen said those statistics were appalling, and underscored her concern about the estimated tax gap, which she said was mostly due to wealthier taxpayers with opaque sources of income.

"The resources of the IRS have been cut to the point where they've largely cut back on the complicated audits, the ones that are harder, of high income taxpayers," Yellen told the committee. "The fact that such a large share goes to audit the EITC is very unfair."

Approving Treasury's budget request for $80 billion over 10 years, Yellen said, would allow the IRS "to be able to ... make sure that people are paying the taxes that are due.

"It's very unfair to workers in lower income households the way things work now," she said.

U.S. IRS 'under siege', Yellen says, needs $80 billion to beef up tax work
 

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Comments (9)
Christopher Barber
Christopher Barber Jun 07, 2022 8:47PM ET
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Maybe…. Just maybe…. Those “evil, tax dodging” tax payers are not audited at higher rates than those in the upper-midde and lower-high income brackets is because they can, and do, afford high power accounting firms to take advantage of the tax code as written. Where as those who fall in the brackets with higher audit risk are actually those who are also far more likely to engage in unlawful manipulation when filing their taxes.
Ac Tektrader
Ac Tektrader Jun 07, 2022 6:58PM ET
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Putin and his generals, pathetic lossers exercising their profound stupidity and mediocrity to take their country and the world down the drain.
Ronald Johnson
Ronald Johnson Jun 07, 2022 3:57PM ET
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Yeah, get that $600 Billion!!
Sunil Sugnani
Sunil Sugnani Jun 07, 2022 3:16PM ET
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Rich become richer, poor become poorer
First Last
First Last Jun 07, 2022 3:16PM ET
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The poor gets duped by the rich to support/vote for the rich's interests.
Ronald Johnson
Ronald Johnson Jun 07, 2022 3:16PM ET
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The poor get everything free, plus the get paid by the government to be lazy and complain
Ac Tektrader
Ac Tektrader Jun 07, 2022 3:16PM ET
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Ronald Johnson ronald ....the tax code gives over a trillion dollars in tax breaks to the rich every year.....the wealthy and their families are some of the most arrogant, lazy, people in America.
jason xx
jason xx Jun 07, 2022 3:11PM ET
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Yeah and if they get the money it will still be unfair. They are not going to change their MO
WESLEY WARREN
WSQUARED Jun 07, 2022 3:10PM ET
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defund the IRS
WESLEY WARREN
WSQUARED Jun 07, 2022 3:09PM ET
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ya I don't have anything nice to say
dar dar
dar dar Jun 07, 2022 3:06PM ET
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it's all by design
Bonney Lake
Bonney Lake Jun 07, 2022 2:51PM ET
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in the mean time Mr orange find ways to pay less.
jason xx
jason xx Jun 07, 2022 2:51PM ET
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Traitor trump the Cheeto King says he's been under "audit" for the last 5 years.
Luke Davis
Luke Davis Jun 07, 2022 2:51PM ET
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...and in the meantime Bidumb is finding more ways to bankrupt and cripple the USA 🇺🇸
 
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