Agency Watchdog Highlights Unacceptable Levels Of Incompetence And Abuse At The IRS

Ways and Means Committee Chairman Jason Smith (MO-08) blasted the Internal Revenue Service on Wednesday following a series of reports released by the Treasury Inspector General for Tax Administration (TIGTA) this summer showing the IRS is failing to treat all taxpayers the same, to protect their private information, or to provide a basic level of service.

“The IRS continues to live down to expectations as the least trustworthy agency in our federal government,” said Chairman Smith. “The Treasury Inspector General for Tax Administration’s reports from this summer highlight a disturbing pattern of neglect, abuse, and downright incompetence at the agency charged with collecting trillions of dollars in federal tax revenue, and more importantly, protecting the private, sensitive information of millions of American taxpayers.

“While President Biden has been focused on funding an army of IRS agents to audit Americans and squeeze them out of more of their hard-earned money, we have learned that the IRS lost millions of taxpayers’ data and potentially destroyed over 30 million tax records. But according to TIGTA’s reports, that was just the tip of the iceberg. The Ways and Means Committee will continue to conduct rigorous oversight and demand accountability at this agency. The IRS must be held to a higher standard for the American people.”

IRS Watchdog Reports Show:
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Jason Smith Introduces the American Families and Jobs Act to Cut Taxes for Working Families, Grow Main Street Businesses, and Protect American Innovation & Competitiveness.

WASHINGTON, D.C. – In response to specific concerns raised by American workers, families, farmers, and small businesses during field hearings across the country, Ways and Means Committee members have introduced legislation to help struggling families, grow jobs, and support a stronger economy. Today, these solutions are being combined as part of a new legislative tax relief and jobs package by Ways and Means Committee Chairman Jason Smith (MO-08).

Chairman Smith issued the following statement after introducing the American Families and Jobs Act, comprised of three bills: the Tax Cuts for Working Families Act (H.R. 3936), the Small Business Jobs Act (H.R. 3937), and the Build It in America Act (H.R. 3938):

“As we traveled to communities across this country, Americans from all walks of life – workers, parents, farmers, and small business owners – have shared their concerns with today’s chronically high prices, climbing interest rates, labor shortages and supply chain failures, as well as the challenge of competing with China.

“In field hearings held in West Virginia, Oklahoma, and Georgia, we listened to their stories and their solutions. Now we are taking action to deliver relief and create a better, stronger future for American workers and families. The legislation introduced today pulls together critical ideas introduced by Ways and Means Committee members in response to needs and concerns voiced by the American people. It builds on successful tax policies enacted by Republicans that spurred higher economic growth – far more than projected – and sparked the fastest growth in real wages in 20 years. These policies will provide relief for working families, strengthen small businesses, grow jobs, and protect American innovation and competitiveness.”
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1. While testifying before the Ways and Means Committee on Friday, Treasury Secretary Janet Yellen made a number of remarks that were newsworthy, ranging from how IRS audits will impact the middle class, to her refusal to share details about who will really pay President Biden’s proposed tax hikes. Here are six key moments.

Secretary Yellen committed to make public the IRS’s plan for its $80 billion in new funding to hire 87,000 new agents.
Chairman Jason Smith (R-MO) asked Secretary Yellen at the beginning of the hearing whether she would commit to providing Congress with the IRS’s plan for the $80 billion in new funding provided by Democrats in the so-called “Inflation Reduction” Act. Secretary Yellen promised that the plan would be provided in a matter of “weeks.”

2.Secretary Yellen admitted that the number of taxpayers facing new audits may rise, while the proportion of audits may stay the same relative to “recent years.”
Rep. Adrian Smith (R-NE) asked Secretary Yellen about her directive that is supposed to protect middle-class taxpayers from a rise in audits. Yellen admitted that the number of audits would increase for families – but not the proportion of total audits. Based on Yellen’s answer, Rep. Smith summarized: “So, according to the data, we can expect up to 90 percent of the new audits to be on those making less than $400,000.”

3. Secretary Yellen refused to commit to showing how middle-class families and small businesses would be protected from President Biden’s tax hikes.
Chairman Smith asked Secretary Yellen to share the legislative text of President Biden’s proposed new tax hikes as part of his Fiscal Year (FY) 2024 budget, in order to show how, exactly, the middle class wouldn’t see higher taxes. But Secretary Yellen declined to commit to doing so.

4. Secretary Yellen admitted that Treasury’s proposed bank monitoring program that would surveil Americans’ personal bank transactions could not go forward without legislative approval.
Rep. Drew Ferguson (R-GA) noted to Secretary Yellen that Democrats’ attempt to create a bank surveillance program for the IRS was blocked by Republicans. He asked for assurances from the Secretary that none of the funds that are going to the IRS will be used to implement such a bank monitoring program unless it is directed explicitly by Congress. Secretary Yellen replied, “Of course not.”
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