The IRS doesn’t need tens of thousands of more auditors. It needs technology and focus to preform it’s legitimate duty without harassing the American people.
Republicans believe every day is the Fourth of July, but the democrats believe every day is April 15.
President Ronald Reagan
Like millions, I’m enjoying the Elon Musk railroad over the bureaucracy. Yes, I voted for it, and it’s more fun than I thought it would be. I’ve also noticed the usual suspects are screaming about how many bureaucrats are losing their jobs and find it particularly interesting how some liberals are horrified the IRS will not get the additional 80,000 plus people planned in the Inflation Production Act of 2022. Even before the disaster of the Biden years, liberals wanted more tax collectors and auditors. From ProPublica (2018):
…it’s taken eight years to bring the agency that funds the government this low. Over time, the IRS has slowly transformed, one employee departure at a time.
The result is a bureaucracy on life support and tens of billions in lost government revenue. ProPublica estimates a toll (lost revenue) of at least $18 billion every year, but the true cost could easily run tens of billions of dollars higher.
The cuts are depleting the staff members who help ensure that taxpayers pay what they owe. As of last year, the IRS had 9,510 auditors. That’s down a third from 2010. The last time the IRS had fewer than 10,000 revenue agents was 1953, when the economy was a seventh of its current size…
The IRS conducted 675,000 fewer audits in 2017 than it did in 2010, a drop in the audit rate of 42 percent… Auditors are stretched thin, and they’re often forced to limit their investigations and move on to the next audit as quickly as they can.
“The last time the IRS had fewer than 10,000 revenue agents was 1953, when the economy was a seventh of its current size” True, the economy was much smaller, but the tax code was seriously more complex. You had a top rate of 91% but you could deduct pig snot (slight exaggeration). In spite of the efforts of countless administrations, simplifying the tax code is still a work in progress.
After the 1994 Republican Revolution, I remember one witness to a Congressional hearing. The president of a major oil corporation (Shell or Exxon?) showing his company’s latest filing. It was larger than the Encyclopedia Britannia, tens of thousands of pages long. The man reviewed the tens of millions it cost, and how many man years it took to prepare. His said it succinctly, “We’re a multi-billion-dollar corporation operating in more than half the countries on earth. We cannot file our taxes on a single page. But this is ridiculous.”
I don’t question the IRS needed more manpower in the 1950, when all returns were prepared on paper, mailed in, processed by thousands of bureaucrats. But is that’s what is needed now?
Four massive tax acts (John Kennedy, Ronald Reagan, George W Bush, and Donald Trump) worked similarly. A mixture of lower rates, higher standard deductions, and fewer itemized deductions. This has dropped millions of lower income earners from the tax rolls, and we are using more simplified forms (e.g., 1040E, 1040EZ, 1040 SR). Now technology is making filing easier and more open.
The first e-filing occurred in 1986 (5 people using tape readers). Times have changed. As of TY 2023, over 90% of individual tax forms were filed by e-file (I think my last paper filing was 15 years ago). Beginning with TY 2024, the IRS made it practically mandatory for businesses to e-file. It’s not much of a stretch to think e-file will become required for all tax actions in the future.
So let’s look at IRS staffing. With e-filing becoming the norm, do you need thousands of bureaucrats inputting forms, reviewing returns, etc.? No. But the bigger question raised by Politico (give the devil his due), are we auditing enough high-end earners? Maybe this is a legitimate issue. Then, do I need thousands of MBAs to handle this task? I would say no.
A work that makes liberals cringe like fingernails on a chalkboard shows the way. DODE, or the Department of Government Efficiency. In a matter of weeks a handful of people, using Artificial Intelligence, have exposed hundreds of billions of dollars in wasteful spending throughout government (they haven’t even started on the real pigs, GSA, HHS and DOD). Put another handful of talented AI specialists into the tax collection process, they will find how people dodge (as opposed to using legitimate deductions and other items) their taxes.
John Q Public making $50, 000 a year with one W-2 should not have to fear an audit. However, complex returns (e.g. Apple Computers, some smaller businesses, Bill Gates) do need more scrutiny due to a complex tax system (thanks to a Congress which complains about people “dodging” taxes using the system they created and sold to the highest bidder, but that’s another issue). AI and other automated assets can pinpoint legitimate targets for deeper review, and you can use your auditors, etc. more efficiently. Not likely what Democrats are interested in (they want union labor), but it will make the system more capable by orders of magnitude.
The IRS could also take a clue from H&R Block and other tax companies and hire seasonal help. I would wager there are retired CPAs, MBA, etc. who could use some work to pay for the vacation to Ireland or just something to get them out of the house for a few months a year. They could help during the busy season and then go back home. Think of it as a H-2A program for white collar workers.
Where do we go from here? Simplifying the tax code must continue, focus on lower rates, fewer deductions, and a larger standard deduction. We need to make e-filing mandatory for all tax submissions (we’re in the 21st Century, let’s act like it). And we need to put the IRS bureaucracy on a diet. Keep an enforcement/auditing staff strong enough handle legitimate issues, not targeting political enemies of the administration (see Obama and O’Biden). Use our resources and talent to find real tax cheats. Remember, Democrats love having a complex tax code to make compliance difficult. We need to fight that.
At the 1998 Academy Awards, Arnold Schwarzenegger the audience of the 1997 blockbuster Titanic, “Titanic has made so much money no accountant can hide it.” It’s been known for ages Hollywood (like other rich entities) employes accountants, lawyers, etc. to hide their money from taxes and legal scrutiny. Hopefully between AI and further tax reform, no accountant will be able to hide the money of Hollywood, or of the Clinton or Gates foundations.
Michael A. Thiac is a retired Army intelligence officer, with over 23 years experience, including serving in the Republic of Korea, Japan, and the Middle East. He is also a retired police patrol sergeant, with over 22 years’ service, and over ten year’s experience in field training of newly assigned officers. He has been published at The American Thinker, PoliceOne.com, and on his personal blog, A Cop’s Watch.
Opinions expressed are his alone and do not necessarily reflect the opinions of current or former employers.
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