IRS has ‘no record’ on request to increase funding for more agents

The Internal Revenue Service (IRS) reportedly has “no record” on a previous proposal to increase funding to add more agents and expand its authority over US bank accounts with more than $600 a year in transactions.

Conservatives readied their battle positions in 2021 when President Joe Biden’s Build Back Better plan included a provision requiring banks to provide information to the IRS on accounts with $600 or more in annual transactions. The policy would also have applied to peer-to-peer apps like Venmo, CashApp and Zelle.

At the time, Treasury Secretary Janet Yellen said the proposal would close a $7 trillion tax gap over the next decade.

“The proposal does not involve any reporting of an individual’s individual transactions,” Yellen told CBS News. “The big picture is, look, we have a tax gap that over the next decade is estimated to be $7 trillion. Namely, a shortfall in the amount the IRS collects due to individuals’ failure to report the income they have earned.

Joe Biden speaks about the third plank of his Build Back Better economic stimulus plan for working families, July 21, 2020, in New Castle, Delaware. (Photo by BRENDAN SMIALOWSKI/AFP via Getty Images)

Although the proposal, which would have increased the number of IRS agents and cost taxpayers more than $80 billion, was ultimately scrapped, the Functional Government Initiative (FGI) recently discovered that the IRS had no “no such file involving the request for more resources, new agents or any analysis that would justify the controversial political elements.

“The IRS response is not only surprising but also highly unusual for a large government agency asking for an additional $80 billion in taxpayer resources,” the FGI said in a press release. “Their response raises concerns about whether the IRS is behind an effort to withhold public documents that could expose damaging internal reactions and analysis underlying the agency’s actions.”

“Other implications are that the agency has been excluded from analysis and projections submitted by high-ranking political figures, leaving the IRS to defend policies it did not participate in shaping,” he continued. “In any case, this situation is not an example of a functioning government.”

Several questions remain regarding the failure of the application. For example, did the IRS perform the initial analysis or was it an outside agency? Has the policy been discussed with the White House or the Treasury? Above all, why are there no records?

Peter McGinnis, spokesman for FGI, said the almost non-existent paper trail of such a massive budget request and invasive proposal is both “astonishing and frankly unbelievable”.

“Given the congressional scrutiny and media attention on these proposals, one would think the IRS did a thorough review before rolling it out,” McGinnis said. “Based on their response, the IRS simply told us that they had no role in reviewing or implementing any policy that would affect hundreds of millions of Americans.”

“This is exactly the type of government dysfunction that Americans are fed up with,” McGinnis concluded.

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