The dark money crowd is about politics, and far more eligible for classification as political action groups ‒ the kind that often peddle malice and hostility, not assistance and welfare. Nor are its shady cousins with hidden financial footings. The TEA party was not about social welfare. The classification 501(c)4 is for organizations engaged exclusively or primarily in social welfare activities – homeless shelters, food banks, homes for battered women, and so forth.
The Taxed Enough Already party, a loose-knit coalition of anti-government and anti-tax zealots, had sought 501(c)4 tax-exempt status to hide the names of sponsors for its local organizations. Today’s assaults on the IRS have roots nearly a decade back, when the agency took a special interest in the TEA party’s tax exempt status. Congress hasn’t learned that it is dull-witted to bite the hand that feeds us. This leads to a decline in revenue collections coupled with increases in unpaid taxes. The agency lacks experienced employees and managers. Technology at the IRS is at least 20 years behind times, causing ever-growing backlogs. Penny-pinching and IRS budget cuts have prompted equipment deficits, a shortage of agents, an increase in employee turnover. Nearly every problem affecting the IRS today can be traced to a lack of funding. It’s cheap politics to pander to those who loathe the IRS because they don’t like paying taxes, or are trying to avoid them, or who don’t want to get caught cheating on them. For those making between $5 million and $10 million, audits fell from 13.5 percent to 1.4 percent. The Government Accountability Office said that in 2010 the IRS audited 21 percent of tax returns reporting over $10 million in income in 2019, four percent. IRS audit rates have fallen overall in recent years, especially for the wealthy. The IRS collects funds that keep the country going and, for that matter, keeps Kansas flush with federal aid. But as any good business manager knows, profitability does not lie in shutting down the department that generates revenue and collects the money. Tax collecting has never been a cheerful venture. The agency’s history is littered with bickering.
In 1953 it was renamed the Internal Revenue Service. In 1913 a constitutional amendment created the federal income tax the Bureau of Internal Revenue was established to account for collections. It’s an old and cherished fear tactic that dates almost to the bureau’s origins, in1862, when Washington needed money for the Civil War. Wild stories have been stirred up – visions of armed agents raiding mom and pop stores, pensioner shakedowns, a looting the middle-class. New IRS scrutiny will focus on big business, and individuals earning more than $400,000. The Treasury Department says increased enforcement (tax audits) could raise as much as $200 billion in additional tax revenue over ten years.Ĭontrary to rumors, common folk are not targets. The Act’s boost for the IRS has rekindled a lot of loose talk about the agency, which has been underfunded and under-equipped for decades. It continues premium subsidies under the Affordable Care Act, aims to lower costs of prescription drugs, and creates a 15 percent minimum tax on corporations. It also contains a significant investment for fighting climate change. The IRA, signed in mid-August by President Biden, is a skinny version of the Build Back Better bill. This has provoked loud squawks from those who see the agency as a villain. One important provision in the Inflation Reduction Act provides an extra $80 billion for the Internal Revenue Service.
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