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Investments in the IRS will generate even more revenue for the country than previously estimated.
According to a revised projection from the Biden administration, increased funding and staffing for the agency would boost revenue by as much as $561 billion over the next decade, substantially more than earlier estimates. This new analysis takes into account improved taxpayer services, modernizing technology and an increase in voluntary compliance. It also takes into account “the deterrence effect of compliance activities on a taxpayers’ behavior.” That is, taxpayers who are audited one year are less likely to hide income from the IRS in future tax returns.
The investment in the IRS from the Inflation Reduction Act has allowed the agency to rebuild staffing levels and raise its level of service in demonstrable ways. If Congress extends this funding when it runs out, estimated revenues would be as much as $851 billion.
The new findings also show what’s at stake in Republican proposals to repeal or reduce this historic investment in the IRS. Eliminating $20 billion in IRS funding would reduce revenues by more than $100 billion, according to the agency.
NTEU continues to underscore the high return on investment in the IRS and opposes any efforts to reduce the money received from the Inflation Reduction Act.