[Congressional Record Volume 170, Number 43 (Monday, March 11, 2024)]
[House]
[Pages H1061-H1062]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                       IRS'S NEW AUDITING EFFORT

  The SPEAKER pro tempore. The Chair recognizes the gentleman from 
Connecticut (Mr. Courtney) for 5 minutes.
  Mr. COURTNEY. Mr. Speaker, I stand here today on March 11, 35 days 
away from April 15, the tax filing deadline for 2024.
  This is certainly not a joyful or happy event, but it is important to 
acknowledge that the IRS recently reported that 85 percent of Americans 
pay their taxes on time.
  For most others, extensions are requested due to paperwork delays, 
illness, or other exigencies, which is proof that the vast majority of 
Americans understand their civic and legal duty to file a return.
  Mr. Speaker, 2 weeks ago, the IRS announced an astonishing new 
initiative to chase down 125,000 high-income individuals who--get 
this--have failed to even file a tax return since 2017.

[[Page H1062]]

  That is right, 125,000 cases have been opened on individuals with 
income over $400,000 per year that filed no returns in the last 6 
years--25,000 of those cases involved individuals with incomes of over 
$1 million per year.
  It is hard to believe that anyone with that level of income would 
have the chutzpah to refuse to file a return and think they would get 
away with it. In fact, the IRS has reported that in all these cases, 
they received third-party information, such as W-2 forms from employers 
and 1099 forms from financial institutions that clearly indicate these 
people received income in these ranges but never filed their own 
return, and, of course, never paid the legally required tax.

  How is it possible that such flagrant, arrogant behavior went 
unnoticed, you might ask? It is because Congress, most notably 
Republican majorities in Congress, for decades have willfully starved 
the IRS of staff and technology to track such freeloaders.
  Here is the record: From 1994 to 2021, the workforce of the IRS has 
been cut by Republicans in Washington by one-third. At the same time, 
America's population has grown by one-third.
  As a result of defunding the IRS, the IRS has been able to file its 
nonfiler program only sporadically since 2016. Because of this, tax 
cheats have gotten bolder and more brazen.
  The good news, as the IRS Commissioner Danny Werfel reported 2 weeks 
ago, because of the Inflation Reduction Act which passed in the last 
Democratic-controlled Congress without a single Republican vote, the 
IRS now has more staff and technology to pursue such blatant tax 
cheats.
  Werfel estimates that this nonfiler initiative alone is focused on 
financial activity of more than $100 billion.
  Since this effort started 2 weeks ago, it is unclear exactly how much 
tax and penalty will be recovered, but given that the failure to file 
penalties of 5 percent per month on tax owed, conservative estimates 
are hundreds of millions of dollars will be recovered for past years 
and even more for future compliance.
  I want to be clear. This effort is not auditing the content of 
taxpayer returns. These are cases of high-income earners who had the 
gall to not even file a return.
  Mr. Speaker, this behavior is an insult to hardworking fellow 
Americans who obey the law and fulfill their civic duty, and at the end 
of the day bear the financial costs of this despicable misconduct.
  Speaking of the middle class, Werfel made it clear that this new 
auditing effort on nonfilers is aimed at high-income tax cheats. That 
is in accordance with a Treasury directive by Secretary Janet Yellen 
that there would be no new enhanced IRS auditing on middle-class 
Americans. That makes sense.
  The National Bureau of Economic Research estimates that audits aimed 
at the top 10 percent of Americans generate $12 of revenue for every $1 
spent. That proportion declines dramatically with lower income filers.
  It is a good thing that the 2022 Inflation Reduction Act is now at 
least partially restoring IRS's capacity to ensure that all of the rich 
actually file their returns and pay their fair share of taxes. It is a 
good thing that Democrats have blocked Republicans' efforts to once 
again cripple IRS's funding over the last year and a half.
  Independent analysts such as the Congressional Budget Office have 
confirmed that this effort to track down scofflaws will actually cut 
the deficit. Indeed, the IRS announced that the Inflation Reduction Act 
effort will bring in 561 billion new dollars from 2024 to 2034.
  For the 85 percent of Americans who work hard and play by the rules--
teachers, cops, nurses, factory workers, office workers, retirees, 
military servicemembers, to name just a few--who pay their taxes with 
each paycheck, making sure that the wealthy file their returns and pay, 
too, is fundamental to a fair and just society.
  The Inflation Reduction Act is doing exactly that.
  Mr. Speaker, so as this April 15 approaches, the message is now clear 
for the well-to-do delinquents: The free ride is over. You have to obey 
the law and file your return just like everyone else. This is not too 
much to ask. No more freeloaders.

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