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The IRS has been underfunded and understaffed for a while, leading to them to focus their attention on lower income taxpayers whose returns are easier to audit, leaving higher-income individuals with more complicated returns to exploit their more opaque tax avoidance strategies. The result has been a significant loss of revenue due to under enforcement.
Biden and Democrats proposed beefing up the IRS' enforcement operations as a way to pay for this new bipartisan infrastructure bill. Republicans rejected that plan.
Senate Infrastructure Bill Drops IRS Funding, Raising Pressure for New Revenue
Biden and Democrats proposed beefing up the IRS' enforcement operations as a way to pay for this new bipartisan infrastructure bill. Republicans rejected that plan.
Senate Infrastructure Bill Drops IRS Funding, Raising Pressure for New Revenue
Lawmakers dropped plans to pay for a roughly $1 trillion infrastructure package in part by boosting tax-collecting enforcement at the Internal Revenue Service, a setback for the bipartisan measure ahead of a looming deadline for agreement.
The shift came after pushback from Republicans who were wary of granting the agency more money and power, Sen. Rob Portman (R., Ohio), one of the lead negotiators, said Sunday on CNN. Legislative aides from both parties confirmed the move.
The change means that the plan to strengthen the IRS to do more to collect taxes owed but not collected—a priority for President Biden —has stalled, at least for now. But lawmakers say it could be revived elsewhere, in a separate spending package pushed by Democrats.