IRS sets its sights on tax avoidance by the super-rich and corporations | opinion
email rounding up the latestIn 2010, Forbes magazine counted 403 billionaires in the US on its annual rich list. This year, there were 735, a four-fifths increase. Yet the number of inspectors employed by theto audit complex tax returns — the kind filed by the ultra-wealthy and corporations — has fallen by almost half over the same period to around 2,600. In the cat-and-mouse game of US tax compliance, the mice have had the run of the place.
More than half the money has been earmarked for enforcement and, if there was any doubt about the agency’s game plan, it was dispelled with the publication in April of a new operating strategy and the installation of a feisty new commissioner, Danny Werfel — a high-flying bureaucrat under previous administrations who has been called back from the private sector after a stint as a management consultant.
And the quantity and length of tax returns has only increased while the cat has been sleeping. The ballooning number of partnerships, used by small and not-so-small business owners and investors to avoid the double taxation associated with traditional corporations, is one area where the IRS has fallen far behind.Audits matter. They extract more money to fund the federal government, limiting the need to increase taxes on everyone.
The step change in audit rates won’t happen overnight. Hiring and training the required numbers of inspectors will take several years. And while, all else being equal, the Inflation Reduction Act may end up doubling the IRS’s workforce, it is hardly the last word on money matters.
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