The portion of the Biden Administration’s Inflation Reduction Act that has probably generated the most Republican opposition was increasing IRS funding to go after high-net-worth tax avoidance.
A good example of the Republican response was Senator Grassley on Fox News just asking a question: “Are they going to have a strike force that goes in with AR-15s already loaded, ready to shoot some small-business person in Iowa with these?”
On Friday, the IRS announced the first projects that the new funds will be applied to. They are targeting:
People with annual incomes above $1M and unpaid taxes in excess of $250K. The IRS says there are 1600 people in this category.
High income earners with offshore bank accounts, as those frequently are used to hide taxable income.
Construction contractors who pay large numbers of sub-contractors, who use phony sub-contractors to pay themselves.
Large transactions involving digital currency, where the IRS says audits turn up 75 tax under reporting.
The agents carrying out these actions will be using spreadsheets and software that searches for anomalous data patterns, but don’t appear to need guns to coax information out of databases.
So do any of this look out -of-line or threatening to ordinary Americans?
Will Senator Grassley issue a correction?
Will the Republicans stop insisting on eliminating this funding for the IRS. Now the IRS is on the line here. The goal is that the tax revenues generated by catching tax cheats will far exceed the investment to catch them. If that does not happen, I’ll join the calls to stop the funding.
But in the meanwhile, this is solid governance. Who is willing to agree with that?
With a possible government shut down looming at the end of the month, It is nice to see once again see a focus (however limited) on collecting revenue rather than more cuts.
Not how you define millionaire. This is targeting people with $1M annual income or more. You can get to $1M net worth with a lot lower income, especially with real estate inflation.
That’s not up to your usual standard of argument, Wu.
"The threshold for this reporting used to be high. Through 2022, third-party payment platforms were required to report gross payments received for sellers who receive:
over $20,000 in gross payment volume AND
over 200 separate payments in a calendar year.
Beginning in 2023, the threshold has been lowered to more than $600 in payments without any regard to the number of transactions.
There is no threshold for payment card transactions such as credit card swipes.
If you cross this threshold, the platform is required to send Form 1099-K to you and the IRS in the following year. But, even if you don’t receive a 1099-K, you’re still required to report any business income you receive through these platforms on your income tax return."
Hard to tell. Inflation has come down more sharply in the US than in any other developed economy, but there are many factors at work.
The US is outperforming most of the world, so we can all by grateful for that, even though I expect you will respond with another statement about how terrible living in the USA is these days.