Why don’t you pick on someone your own size?
That playground taunt comes to mind when noting that the Internal Revenue Service, the tax collection agency we love to hate, audits the working poor at roughly the same rate as America’s wealthiest 1%. The award-winning nonprofit news outlet ProPublica reported that during the spring.
Now, ProPublica reports, we know the reason: Poor Americans are easier to pick on than rich Americans.
The IRS commissioner, Charles Rettig, said as much in a report prepared in response to inquiries by U.S. Sen. Ron Wyden, D-Ore., who cited the ProPublica reporting. Wyden, you might recall, has teamed up with Iowa Republican Chuck Grassley on other consumer-focused issues, such as lowering prescription drug prices.
Rettig said the IRS follows the path of least resistance. Low-income taxpayers might not have much money, but their audits are easy — often done via mail and handled by lower-paid staffers. Now, auditing the rich is another story. It requires hours of senior auditors’ time — plus the rich have the resources to fight back.
Does the commissioner plan to correct this counter-intuitive approach to tax collection? No. Not until the IRS budget is replenished. For virtually this entire decade, Congress has cut the agency’s budget — by about one-fourth, adjusting for inflation — and Rettig said the IRS is doing what it can afford to enforce.
Wyden issued a statement agreeing the IRS is underfunded, “but that does not eliminate the need for the agency to begin reversing the alarming trend of plummeting audit rates of the wealthy within its current budget.”
Meanwhile, Wyden’s partner on other bipartisan initiatives, Grassley, seems to have a different concern about IRS audits. He doesn’t want the agency picking on, of all organizations, the National Rifle Association.
Chair of the Senate Finance Committee, Grassley said the IRS should not cave to Democrats’ calls for an audit of the NRA’s tax-exempt status, claiming it would constitute “ideological weaponizing of the agency.”
So, despite disclosures of the NRA’s rampant financial mismanagement and misconduct, leadership fallout, multiple lawsuits and an investigation by the New York attorney general, the Iowa senator is saying: “Just move on. Nothing to see here.”
If it takes more funding to get the IRS to tilt the playing field in another direction — so rich Americans, who make the most and have the most to hide, are audited as much as (if not more than) the poor — then it should get it. The budget-cutters in Congress aren’t doing 99% of taxpayers any favors by causing the IRS to pick on the little guys.