Leaders.com
  • Login
  • Subscribe
  • Business
  • Leadership
  • Wealth
  • Master Classes
  • Business
    • Entrepreneurs
    • Executives
    • Marketing and Sales
    • Social Media
    • Innovation
    • Women in Business
  • Leadership
    • Personal Growth
    • Company Culture
    • Public Speaking
    • Productivity
    • Hiring
    • Social Issues
    • Leaders
  • Wealth
    • Investing
    • Cryptocurrency
    • Retirement
    • Venture Capital
    • Loans and Borrowing
    • Taxes
    • Markets
    • Real Estate
  • Master Classes
  • Login
  • Subscribe
Public Policy

Democratic senators have asked the Internal Revenue Service to do more audits on wealthy taxpayers (Photo by STEFANI REYNOLDS/AFP via Getty Images)

By Hannah Bryan Leaders Staff

Hannah Bryan

Hannah Bryan

News Writer

Hannah Bryan is a news writer for Leaders Media. Most recently she was a reporter for the Sanilac County News...

Full bio


Learn about our editorial policy

Mar 17, 2023

Senators Tell IRS To Audit the Rich

Top Democrat lawmakers are asking the Internal Revenue Service (IRS) to take a closer look at wealthier households and businesses after receiving a funding increase last year. 

Key Details

  • Senator Elizabeth Warren (D-MA) and 24 fellow Democrat senators are asking the IRS to increase its audits now that the agency has increased funding. 
  • In a letter to the IRS, the senators asked that the agency focuses on larger corporations and households earning more than $400,000 annually. 
  • “Billionaires cannot avoid scrutiny by using tax-avoidance strategies to report low incomes,” the senators’ letter says. 

Why it’s news

President Joe Biden and many in the Democratic Party maintain that the wealthiest Americans do not pay enough in taxes. In March, the president proposed the Billionaire Minimum Income Tax that would require the wealthiest Americans to pay at least 20% on all income. In addition, he says, the wealthiest are able to take advantage of loopholes to reduce their tax bill.

The overall number of audits decreased from 0.9% to 0.25% from 2010 to 2019. And an analysis from Syracuse University found that households with incomes below $25,000 were five times more likely to be audited. Reports from the Government Accountability Office say that low IRS staffing can explain the disproportionate audits. 

A big reason why is that there are many mistakes made in claiming things like the Earned Income Tax Credit, American Opportunity Tax Credit, or Additional Child Tax Credit—all geared to low-income filers.

As the report notes: “This group of taxpayers has historically been targeted not because they account for the most tax under-reporting, but because they are easy marks in an era when the IRS … doesn’t have the resources to assist taxpayers or answer questions.”

In 2022, IRS budget cuts resulted in 1,400 staffers examining 164 million taxpayers’ tax returns. Low staffing resulted in the agency relying on automation to move through returns more quickly, Forbes reports. 

The Inflation Reduction Act passed last year included an $80 billion increase in IRS funding. The Congressional Budget Office expects the IRS to bring in another $204 billion in revenue as a result. 

Last year, 626,204 individual tax returns were audited out of the 164 million income tax returns filed. 

To be clear, the wealthy are paying taxes. The Tax Policy Institute reports that in 2019, 68% of all federal income tax collected by the IRS came from those in the top 20% of income earners. And, on average, the top 1% of income earners pay 29% of their earnings in federal income tax and the top 20% pay 24%.

Backing up a bit

Last August, Treasury Secretary Jane Yellen told the IRS not to increase middle-class audits.

The Inflation Reduction Act includes funding for an increase of 87,000 new IRS hires. Some Republican members of Congress have raised concerns that additional funds for the IRS budget could result in more audits on middle-class families. 

To quell concerns, Secretary Yellen wrote a letter to the IRS asking that the new funds not be used for auditing middle-class families. Instead, it is implied, to go after the wealthy.

“Specifically, I direct that any additional resources—including any new personnel or auditors that are hired—shall not be used to increase the share of small business or households below the $400,000 threshold that are audited relative to historical levels,” she wrote. “This means that, contrary to the misinformation from opponents of this legislation, small business or households earning $400,000 per year or less will not see an increase in the chances that they are audited.”

Home / News / Senators Tell IRS To Audit the Rich
Share
FacebookTweetEmailLinkedIn

Related Stories

Side Hustles—One Answer To a Recession

by Hannah Bryan Leaders Staff
Business

60 minutes ago

side hustle

More Americans are working extra jobs, or side hustles, to create additional cash flow while expenses rise.

Key Details

  • A 2022 survey from Insuranks found that 93% of Americans have some sort of side hustle in addition to their full-time or part-time job. 
  • Of those who work side hustles, 80% have a full-time job. Both full-time and part-time workers say they dedicate 13 hours per week to their side hustle. 
  • Though a side hustle cuts into available free time and may add some stress, the majority of respondents planned to continue working the side hustle and say the inconvenience was worth it. 
  • Most people working side hustles are doing so to have extra cash, whether that cash is needed to pay for necessary expenses or for spending money. 
  • However, working a side hustle can have its downsides. Depending on the side hustle, a worker may need additional insurance or pay more taxes. 

Go deeper

FacebookTweetEmailLinkedIn

Apple Heads To Hollywood 

by Tyler Hummel Leaders Staff
Entertainment

4 hours ago

AppleTV+ is shifting its attention from streaming exclusivity to the releasing first-run feature films into the theaters. 

Key Details

  • Apple is planning to spend $1 billion annually to produce theatrically released films, anonymous sources tell Bloomberg. 
  • This marks a change for AppleTV+ plus, which has exclusively released its content on its streaming service, a move that could bring greater brand awareness to the smaller platform. 
  • The company already has several high-profile exclusives set to release this year, including Martin Scorsese’s Killers Of the Flower Moon and Ridley Scott’s Napoleon—which could see these potential Oscar contenders receiving theatrical releases. 
  • AppleTV+ reportedly has between 20 million and 40 million subscribers, making it one of the smaller contenders in the “streaming wars.”  

Go deeper

FacebookTweetEmailLinkedIn

DOE Bets On Risky Energy

by Savannah Young Leaders Staff
Environment

Mar 25, 2023

ARPA-E Fast Pitch - Dr. Jenifer Shafer, Dr. Robert Ledoux, and Dr. Ahmed Diallo

The Department of Energy (DOE) is hosting its annual ARPA-E, or Advanced Research Projects Agency–Energy, conference with many innovations focusing on carbon reduction.

Key Details

  • ARPA-E funds risky energy projects that have difficulty receiving private sector investment.
  • The agency has given out some $3.3 billion to more than 1,400 projects since 2009, according to Bloomberg writer Ari Natter.
  • ARPA-E projects have led to some $11 billion in private sector funding, the formation of 131 companies, and 934 patents, according to the Energy Department.
  • Recent efforts showcased at the conference focus on decarbonization, including microbes that can absorb elements needed for batteries and carbon-negative cement.

Go deeper

FacebookTweetEmailLinkedIn
An attendee tries Google Glass during the Google I/O developer conference on May 17, 2013 in San Francisco, California.
Business

Mar 25, 2023

Tech Too Good To Be True

by Savannah Young Leaders Staff
Productivity

Mar 24, 2023

Working Nine To Five … Well, It’s Not That Simple

by Hannah Bryan Leaders Staff
OpenAI, the parent company of ChatGPT, CEO Sam Altman, has acknowledged the AI risks and potentially dangerous outcomes of ChatGPT
Business

Mar 24, 2023

Companies Scrambling For A.I. Regulation

by Savannah Young Leaders Staff

Recent Articles

Leadership

Mar 22, 2023

Creating Loyal Employees Is About More Than Just the Paycheck

If you think simply paying your employees more will gain their loyalty, think again.

Business

Mar 20, 2023

Worried About ADHD At Work? Here’s How It Might Actually Help You

Neurodivergent people often have a high level of creativity and innovative thinking.

Productivity

Mar 17, 2023

Unlocking Your Inner Drive: How to Motivate Yourself

Make real progress by trying out these techniques for boosting your self-motivation.

  • Business
  • Leadership
  • Wealth
Join the Leaders Community

Get exclusive tools and resources you need to grow as a leader and scale a purpose-driven business.

Subscribing indicates your consent to our Terms & Conditions and Privacy Policy

Leaders.com
  • Privacy Policy
  • About
  • Careers
  • Cookie Policy
  • Terms
  • Disclosures
  • Editorial Policy
  • Member Login

© 2023 Leaders.com - All rights reserved.

Search Leaders.com