Increase Funding to the IRS
The IRS has been in the papers lately for its bad behavior. It subjected many conservative groups and a few liberal groups to added scrutiny and long delays in the approval of their organizations. It has spent large sums on questionable conferences. Some IRS employees have abused their credit cards. Find the guilty folks, punish them, and move on.
It is imperative that the IRS collect the outstanding money owed to the Federal government and labeled the tax gap. This tax gap amounts to an estimated $450 billion per year; i.e., funds owed to the federal government but unpaid because of underreporting of income ($376 billion), non-filing ($28 billion), and underpayment of taxes ($46 billion). If we collect half of that, it shrinks the federal deficit by one third. We can collect those taxes owed to the federal government by adding personnel to the IRS and doing more correspondence and field audits. We recommend auditing all income tax returns over $1,000,000. This can be accomplished by auditing each of these taxpayers every 3 years for the last 3 years filed. We recommend auditing all tax returns over $200,000 a year but less than $1,000,001. This can be accomplished by auditing each of these taxpayers every 4 years for the last 4 years. We recommend doubling the audit rates on all other returns. Further, tax preparers of over aggressive returns should be scrutinized and re-educated, fined, or removed from tax preparation work.
The additional funds needed to accomplish this are estimated to be $3 billion per year. This expenditure will return much more in new tax revenues than it will cost. Economically, we should continue to invest in the IRS until the last dollar spent generates a little less than a dollar. We are not even close to this theoretical figure. The President has asked for a $1 billion more for FY2014. The IRS budget should be increased by $2 billion more than this. We would hope the Congress and the President would add $3 billion to the IRS budget for FY 2014 and thus substantially reduce our horrendous deficit and contain our debt accumulation.
Harry Pukay-Martin
