President Barack Obama is requesting 4,182 additional Internal Revenue Service (IRS) staffers as part of his $1.1 billion budget increase for the tax-collecting arm of the Treasury Department. The requested staffing increase would cost about $426 million, and the staffers earn about $74,000 in annual salary. But the president hasn’t said exactly what these new IRS employees are for. They could be new tax collectors, auditors, support staff, paralegals or lawyers — nobody seems to know, or be willing to say if they do.
The request has caused a rift on the Hill, with House Budget Committee member Rep. Todd Akin, Missouri Republican, describing the proposed IRS cast of thousands as a “goon squad” during a hearing Wednesday afternoon.
Akin said he thinks the IRS’s time would be better spent helping people and small business owners understand the tax code, which is complicated, rather than building a new auditing and tax-collecting force.
“Not to mention the fact that it’d make us all look better if we don’t have a goon squad of 5,000 IRS agents tromping around the country with the economy the way it is,” Akin said.
Pete Sepp, a spokesman for the National Taxpayers Union, told The Daily Caller that Obama’s lack of clarity on the issue could have two explanations. The first, he said, is that the president genuinely doesn’t know what he wants the new IRS employees to do. The second, and more likely possibility, Sepp said, is that Obama wants to keep the job descriptions vague to retain flexibility.
Sepp said new auditors and collectors could solve some revenue-collection problems, but that adding such employees could create more problems than it solves.
“In our opinion, it’s a double-edged sword,” Sepp said in a phone interview. “In order to investigate some of the most complex cases involving potential tax evasion or avoidance that skirts the line, you need tremendous personnel resources on returns that might number in the hundreds, maybe even thousands, of pages for some businesses.”
Sepp said when auditors aren’t fully trained tax lawyers or paralegals, they’ll often go after low-hanging fruit — small business owners — who usually aren’t intentionally committing any major tax fraud.
Ryan Ellis, a tax policy specialist for Americans for Tax Reform, told TheDC that 99 percent of tax violations happen because people and businesses don’t know the rules. He said auditors often go after people and small businesses with the assumption that they’re guilty, too, and that hiring more auditors isn’t going to solve any revenue collection problems. He said that the 1 percent that’s intentionally evading tax payments now will find a way to do so no matter what the administration does to try to stop them.
“It’s just like during prohibition,” Ellis said. “If you have a tax system that has marginal rates that are too high, and incentivizes people to maximize deductions and minimize income, then people are going to take the risk and find a way to do that.”