This week I argue that a vague "pay more attention to the tax returns of the rich" mandate falls short -- we need real, quantifiable performance metrics.
Previously the IRS committed to auditing 8% of returns with over $10m in income. They abandoned that in favor of a general focus on higher income individuals and corporations.
I argue for 100% audit coverage of the top 1% of returns by income.
@andrew Right, so you'd triple the work they would have to do which means they wouldn't be able to spend as much time unraveling the webs of the ultra-rich.
To be in the "top 1%", you have to make roughly $600K a year. That's a lot, but it's not Swiss bank account money.
I think it’s hand wavy to just give them a pass on doing a slipshod job because they're given a broader mandate. They've not been unraveling the webs of the ultra-rich to this point -- what is the excuse there?
We don't do ourselves any favors asking for the bare minimum and accepting even less.
@andrew I never said we should give them a pass. I just think the plan you've laid out would make the problem worse, not better.
Welp agree to disagree. I generally think demanding thresholds be met w/r/t audits, keyed to income, will lead to more audits. But maybe maintaining the status quo will result in outcomes different from what we've seen to this point?
@andrew I'm not entirely opposed to that. My main concern is that you've set your thresholds far too low.
Why not have such quotas, but keep the target above $10M a year? Why do the quotas have to come with a massive increase in quantity of targets?
I disagree that simply *auditing* the returns of the top 1% is an unreasonable ask. It’s 1.5 million returns. They're already auditing ~580k.
You don't get major changes by asking for crumbs. Asking the IRS to audit 3x the number of returns per year they have, when they've been notoriously understaffed and gutted for decades, is modest.
@andrew Wait, what? I'm really struggling to wrap my brain around that argument.
You think piling triple the work on an already overworked staff will make things better?
They just received ~$60b in part to rectify these issues, a reflection of how clear their understaffing has been to this point.
So, yes, I think taking the audit count from the skeleton crew as the best you can ask for, when this is ostensibly supposed to be ameliorating that issue, is bananas.
Use that funding to hire more people, automate processes where you can. It isn't our job to account for unforced errors when laying out what policies should be pursued.
@andrew Wait, has that money not kicked in yet? I thought they got it a year or two ago?
How would it apply less scrutiny to the ultra-rich if they are, by definition, being audited?
As it stands they are neither adhering to the 8% of $10m+ nor any other defined performance metric -- just vaguely focusing more generally on the ultra-rich and corporate returns.
You don't overcome an entrenched culture of declining to audit the wealthy by vaguely suggesting it should be done.
"Top 1%" and "ultra-rich" are not synonyms.
I didn't suggest they were. You said they'd pay less attention to the ultra-rich because they've been tasked with auditing a broader pool of returns.
As above, you're just accepting as read that if you ask them to look at A and B, they'll pay less attention to A than if you only asked them to look at A.
I would consider separating what you think will happen from what you're demanding they do, and not rolling the former into the latter and undercutting your own interests.
@andrew
> As above, you're just accepting as read that if you ask them to look at A and B, they'll pay less attention to A than if you only asked them to look at A.
Yes, I am "just accepting" that. It seems to be an immutable law of fixed manpower, does it not? A group of people doing 3 jobs will always be more effective at each job than the same group attempting to do 9 jobs.
Sure, but why does the immutable law of fixed person-power apply to an agency that has sought billions to increase its ranks? Tax is the chief revenue source for the US government, why is it we can't hire more IRS employees?
Again, we're just discounting any action that could be used to overcome the hurdles to improvement but still demanding improvement. It isn't going to work out.
@andrew Hey, I'm all for getting the IRS more manpower.
I just don't see how that's remotely politically possible in the near future.
The IRS got $80b under the IRA to, in part, hire more employees. It was reduced by $1.4b by Congress in 2023 and another $20.2 in 2024.
You don't need to do the anti-tax folks' work for them, they can take care of themselves. Demand accountability.
@LouisIngenthron
"Achieving 100% audit coverage for the top 1% would entail auditing more than 1.5 million returns. In 2023, the IRS closed 582,944 audits in total—resulting in $31.9 billion in adjustments, for an average of a bit more than $54,000 per audit.
By comparison, for tax years 2016 through 2021, audits of individual taxpayers with $10 million in income or more averaged $124,389 per return.”