Among the Biden administration's accomplishments in the last few months has been shepherding through Congress an $80 billion increase in funding for the IRS. Part of the reasoning behind the cash dump was increasing enforcement, making sure those ultra-rich tax scofflaws paid their fair share.
But as is too often the case with more aggressive enforcement of federal rules and regulations, it's the middle and working classes who get the extra scrutiny. Consider the IRS' renewed and aggressive interest in the humble restaurant tip jar:
…the Treasury Department and IRS announced plans to overhaul existing programs that track tips earned by service sector workers. The new Service Industry Tip Compliance Agreement (SITCA) program will “take advantage of advancements in point-of-sale, time and attendance systems, and electronic payment settlement methods to improve tip reporting compliance,” according to the IRS.
Of course, workers who earn more than $20 in monthly tips are already required to report their tips to their employers, and those tips are supposed to be included in tax data sent to the IRS.
But a lot of that money never finds its way into the government's hands. As part of the announcement…the IRS highlighted a 2018 Treasury Inspector General report that estimated $1.66 billion in tips went unreported during the 2016 tax year.
Never mind that Tech Bro's shady Bahama's bank account. It's the waitress not reporting that $20 tip who is the real problem.
Only in official Washington could enforcement priorities be so skewed. But there's a powerful incentive behind it all – the IRS audits those making $25,000 or less more often than any other group. According to data from Syracuse University:
The latest Internal Revenue Service (IRS) statistics covering federal income tax audits through February of 2022 reveals that the agency is continuing to target audits on the poorest wage earners. So far it has completed 132,922 audits of these low-income wage earners with less than $25,000 in total gross receipts. This is up from 105,978 audits IRS had completed a year ago at the end of February 2021.
If IRS continues at this same pace for the rest of this fiscal year, audit rates would inch up to 13.5 per 1000 returns – slightly higher than the phenomenally high rates that occurred last year when IRS audited the poorest families claiming an anti-poverty earned income tax credit at five times the rate for everyone else.
The poor, the working poor, those without an accountant or tax lawyer on call…they will always be the first to feel the brunt of government policies because they have the fewest means to fight back.
The opinions expressed in this article are those of the author and do not necessarily reflect the positions of American Liberty News.
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Faithful low info Democrats always fall for slogans like “tax the wealthy.” Then they discover Democrat leaders consider them “wealthy.”
One example was 30 years ago. In 1993, Bill Clinton promised that his tax increases would only apply to those making over $250K a year.
Back then, I had a very liberal Democrat neighbor who constantly ranted the “wealthy” were not paying their “fair share” of taxes. I never argued with him, just let him blather. I never asked, but he mentioned he made $36K a year. Congress passed Clinton’s tax increases in Sept 1993, and made the increases retroactive to 1 January. My neighbor cackled that now, those rich people were going to start paying. I told him to check the IRS website, and he discovered what I already knew. The tax increases started on households with a combined annual income of $30K. I saw him a couple days later, and mentioned he must be very happy because now, he was going to pay his “fair share.” Golly. He did not seem happy at all…..
well the dems belief in fair and equal, you have to go after EVERY TAX PAYER regardless of class