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Letter

President Biden Has Declared War on Middle-class Taxpayers 

The Biden plan would increase the IRS budget six-fold and add 87,000 new agents and auditors

By Jeremy Trebas

The Biden Administration has proposed a massive expansion of the Internal Revenue Service. Let’s be clear about what that means for taxpayers. Biden’s IRS expansion will have more-onerous filing requirements. More Americans will endure invasive audits. More Americans will face lawsuits by their own government. And all of us will spend more time and more money just to ensure we get our taxes right.

This is no minor upgrade at the IRS. The Biden plan would increase the IRS budget six-fold and add 87,000 new agents and auditors. The price tag for all this is $80 billion.

The target of that new spending is not the wealthy – they are already the focus of most of the IRS’s enforcement activity. Instead, nearly all of that spending increase would be used to attack middle-class taxpayers. A review by the Joint Committee on Taxation estimates that about 90% of the enforcement activity in Biden’s proposal will land on taxpayers earning less than $200,000 per year.

This is happening because earlier this year Biden was not able to get the votes to increase the top individual tax rate to support his spending binge. With the failure of that tax hike, plan B is to unleash this army of tax agents on Americans to bring in new revenue.

In light of that strategy, a focus on middle-class taxpayers makes perfect sense. People earning less than $200,000 generally can’t afford expensive accountants and tax lawyers — they’re more likely to settle with the IRS rather than endure years of costly litigation.  

But increased enforcement actions are only the tip of the iceberg of Biden’s IRS scheme. What’s received less attention are the plans to significantly expand financial surveillance.

The bill signed by President Biden included references to new spending on “investigative technology” and “digital asset monitoring.” We don’t yet know the full details of what all that means, but we have a few hints.  

One part would be to require banks to report to the IRS every transaction you make over $600. This amounts to an enormous “fishing expedition” by the IRS to identify “suspicious” transactions and increase the odds of particular individuals being audited. This move is obviously a warrantless search and a violation of our Constitutional rights – but as we know that hasn’t deterred this President before.

Another part of the plan is innocuously referred to as “return-free filing.” Under return-free filing, taxpayers would no longer prepare their own returns. Instead, we would be required to provide all of our financial data to the IRS, which would then use that information to inform us of what we owe in taxes.

Return-free filing is a glaring conflict of interest for the IRS, which would assume the role of tax preparer in addition to being the examiner and enforcer. But this concept also creates a nightmare scenario for taxpayers who would face the daunting task of appealing to — and potentially suing — the IRS in order to get their taxes right.

Return-free filing would also require the IRS to create the grand-daddy of all financial databases, with a complete record of the financial lives of all Americans. After multiple data breaches by the IRS, there is no way we can trust them to keep this sensitive information secure.

The only way to stop this dystopian plan is for Republicans in Congress to cut off their funding. This must be a top priority for the new majority as they take office in January with measures like the IRS Funding Accountability Act sponsored by Montana Sen. Steve Daines. Tens of millions of taxpayers are counting on it.

Sen. Jeremy Trebas
R-Great Falls

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