President Biden wants to give the IRS sharper teeth. He’s proposed increasing the agency’s funding by almost 70% so it can better police tax avoidance and evasion. The focus is supposed to be on wealthy taxpayers and corporations, since they’re the ones who account for the majority of tax misconduct, but what does that mean exactly? Who should be on notice?
Most at risk are taxpayers whose earnings aren’t reported to the IRS by an outside source like an employer or brokerage firm. Studies show that when there’s third-party reporting, compliance rates are around 90%, but when there isn’t, the rate drops to 50%.
Others who have been targeted by recent IRS compliance efforts are also probably going to get more scrutiny too.
Here are some leading candidates.