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.
Add a Comment
We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:
Enrich the conversation, don’t trash it.
Stay focused and on track. Only post material that’s relevant to the topic being discussed.
Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.
Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.