America's Talking - Recent IRS Controversies Raise Doubts About Auditing Army’s Potential Bias

Episode Date: March 3, 2023

President Joe Biden's call for funding for 87,000 IRS agents to audit Americans has raised questions about whether the new rash of auditing will target poorer Americans or be politically motivated. The Inflation Reduction Act included $80 billion to beef up IRS efforts, which Biden says will more than pay for itself in new audits. Biden’s nominee to lead the Internal Revenue Service, Daniel Werfel, addressed concerns over this policy at his recent confirmation hearing but promised lawmakers the audits would target wealthier Americans. Join The Center Square's Dan McCaleb and Casey Harper. --- Listen to Other ATN Productions: America's Talking: An interview podcast hosted by Austin Berg. Guests include professors, journalists, artists, business and nonprofit leaders, authors, and more. Everyday Economics: Join economist Dr. Orphe Divounguy and Chris Krug as they discuss global markets, inflation, and everything else that will help you understand the economic world around you. Future of Freedom: Future of Freedom is a bi-weekly podcast highlighting the work of the non-profits which are shaping the future of the freedom movement. Listeners will hear civil, intellectual conversations about why the organizations exist, what their mission is, and how they work to achieve it. Hosted by Scot Bertram. Support this podcast: https://podcasters.spotify.com/pod/show/america-in-focus/support Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Welcome to America in Focus. I'm Dan McAulb, executive editor of the Center Square Newswire Service. Joining me, as he always does, is Casey Harper, the Center Square's Washington, D.C. Bureau Chief. Casey will recording this on Friday, March 3rd. That means it is March. We're about a month and a half away from Tax Day, the deadline for Americans to file their federal income taxes. Of course, the IRS, the Internal Revenue Service, collects those taxes. But the IRS has said, a number of ongoing issues. You wrote about that recently at the center square.com. What's going on with the IRS and why are they concerned? Yeah, that's the question. What's going on with the IRS? They're having a lot of issues and it's a timely time to talk about this because the Inflation Reduction Act, as we've talked about before, has added about $80 billion to the IRS with

one of the key purposes being to add this army of auditors. And these auditors are going to audit Americans to raise revenue to fund Biden spending. So Biden is basically promised that this $80 billion is spending to hire auditors will more than pay for itself because of the revenue generated by auditing Americans. Now, they've made some promises about it not impacting poor people too much and things, but there's a lot of critics who say that's not really realistic. But that's just, you know, that's just one of the IRS's problems right now. for example, they also had a, if you remember during the Biden administration,

they reached a $3.5 million settlement. This is actually just after it. But it was from the IRS lowest learner, head of the IRS, actually auditing Tea Party groups more than other groups and actually seeking out conservative groups to audit them. So this is still fresh in the minds. I mean, they just settled that in 2018 a few years ago. So this is fresh in the minds of a lot of Americans when you think about giving the IRS more power, giving them more leeway, especially when you even see things in the federal

government about heavy-handed equity approaches. Is this going to lead to even racially based auditing is a question that some on the right or not even lawmakers? So I think faith in the IRS being unbiased in their auditing is really up for question. Now, the IRS has other issues we can get into, but I think a lot of Americans are saying, why are we trusting the IRS to audit more? I'm not sure that they've really proven that they are trustworthy in recent years. Another specific example that you wrote about back in 2021, but that you included in this updated story, is that in 2021, the IRS denied nonprofit status to a Christian group, the agent who made that decision, said the group didn't qualify because, quote, Bible teachings

are typically affiliated with the Republican Party and candidates. So another example of them, perhaps targeting conservative groups? Yeah, I mean, it just kind of shows you what kind of person is working at the IRS. Now, after a lot of outrage was generated about this, the IRS did retract that ruling and kind of fix things up. But that's what it takes is it takes a lot of outrage and it takes hiring a big law firm and all this to, and all Americans can't do that, right? And if we're going to have this huge increase in auditing, and people, you know,

there's going to be people whose stories can make it to, you know, our podcast like this one of the Christian group did that had the funds and the resources to hire an outside legal group to raise awareness and get the IRS to change its mind. So one, yeah, I mean, the problem is there's just so many stories like this, right? And to see such a blatant, just plainly saying, yeah, if you believe the Bible, you're probably Republican and therefore we're going to treat you differently. I mean, one, since there's so many, you know, Christian Democrats, it's kind of a laughable, a laughable claim. I mean, but setting that aside,

the idea that there's people who are using those kinds of arguments and they have the power that just one person, one rogue agent who thinks that way, can just ruin a whole group, destroy a group, right? So where's the review process? Where is the accountability within the agencies so that one rogue agent can't

make some kind of ruling like that? Now, yeah, they appeal that and got overturned. But as I said, everybody doesn't have the resources to make such a big splash about it. And then there's other things like the IRS destroyed, you know, tons of documents. And, you know, the lawmakers are like, why did you destroy so many of Americans' tax documents? Or aren't you supposed to keep those? What if they need them?

And the IRS hasn't really given an answer on that. The IRS also leaked, you know, thousands and thousands of Americans' tax documents to ProPublica, which is kind of a nonprofit pseudo-journalistic group. But that's private, you know, Americans information too. I mean, how would you feel if your tax documents were leaked? So this is, then this is all, everything that I've mentioned has been in about the last 10 or 12 years, right? So I'm not digging up old 20 or 30 year old scandals. And so because of this, lawmakers are digging in, because of this push and auditing, they're saying, hey, we need to get to the bottom of some of these issues.

We need to have closer scrutiny of the IRS, especially if we're handing them $80 billion to audit America. Right. And then one last concern, Casey, is that when the Inflation Reduction Act was passed, funding 87,000 IRS agents for increased audits, President Biden promised that they'd only go after the wealthiest of Americans to make sure they're paying their, quote, unquote, fair share of taxes. But there aren't that many billionaire Americans out there for 87,000 agents. to go after. So the concern was that, no, they're going to be going after middle class families. And then there was the news that you also wrote about in recent weeks about them targeting waiters and waitresses for their tip, for not reporting tips. I don't think there's too many billionaire waitresses and waiters out there. What do you think? Yeah, I mean, the, you might have to check me on this, but I believe there's about a thousand billionaires in the United States. And we're

hiring, you know, tens of thousands of agents, right? So just right there. I mean, you know, these aren't people who aren't all going to be focused on the handful of billionaires that live in the U.S. So, yeah, I mean, there's a lot, there's 100 millionaires you can focus on. But those people actually have really tight tax accounts and they have whole tax teams to make sure that they're in compliance, to follow the letter of the law, even if they skirt the law in all kinds of ways and avoid paying their taxes. They know how to do it legally, right? They have a whole team of attorneys, the average American doesn't have that. You know, they might have H&R block or something, right, or do it themselves. And so those are the people who are actually most ripe

experts will tell you that you actually get the most bang for your buck auditing middle class and lower-class American, lower-income Americans because you actually get the most return on your investment financially because they have the most funds that kind of aren't paid, especially like small business owners and people like that. So they're going to be the ones targeted. And yeah, And as you said, you know, right after, as this is all going on, the IRS announces a crack down on waiters and waitresses tips and working with restaurants, kind of pressuring in a heavy-handed way restaurants to crack down on these waiters and waitresses. So it just kind of violates the spirit of what Biden is saying. And let's not forget, you know, Biden may not be in office in a couple years. And the IRS is this kind of outside agency.

It's always kind of funny to me when presidents promised that agencies are going to do things. things. It's like, one, you don't have that much control over the daily workings of an agency. You know, I mean, how involved is a political president really going to be in what an agency does? And oh, by the way, he's not going to be there in a few years. The agency is still going to have this mandate. It's still going to have this money. And so, you know, the powers and the funding that we give these agencies, it goes on. It always bros. And it often leaves behind the oversides or the promises of the president who instituted it years ago. Our listeners can keep up with Casey Harper's great reporting on the IRS and all things federal government at the

Center Square.com or Casey Harper. I'm Dan McAulip. Please subscribe and thank you for listening. Freedom and liberty are important to all of us. If you're looking for civil, intellectual conversations with those shaping the future of freedom, try the Future of Freedom podcast with me, Scott Bertram. We speak with leaders across the country in the greater conservative and libertarian movements. In-depth conversations about where that intellectual battles will happen across the country. It's the Future of Freedom Podcast. Find it at America's Talking.com or wherever you get your podcasts.