Natasha Sarin Profile picture
Sep 28, 2020 7 tweets 3 min read Read on X
This is 1000% true.

The IRS has been gutted in the last decade, and the beneficiaries are the ultra-wealthy like President Trump.

A thread:
Audit rates for millionaires are down 75% in the last decade

Today, you are as likely to be audited if you are in the top 1% as if you are on the EITC

The result is a tax system that facilitates the kind of illegal games Trump has been playing for decades
Just a few 100 taxpayers cost the IRS $10B between 2014-2016

And they lacked the resources to even pursue these cases!

treasury.gov/tigta/auditrep…
In rare cases when the IRS goes after wealthy & corps they owe, they are stuck in disputes that last for years

Outmatched by those who can spend basically infinite resources to push back

As this great story by @paulkiel details

propublica.org/article/the-ir…
Thus not surprising that the IRS concludes pursuing those on EITC is "most efficient use of available resources"

It simply lacks $$ needed to shift to going after more higher income ppl w/ more complex returns

Here's Commissioner Rettig last year:

documentcloud.org/documents/6430…
We are at a time when the world is appropriately focused on injustices in criminal law enforcement

Those same inequities exist in tax administration

Five counties w/ highest audit rates are all predominantly African American

projects.propublica.org/graphics/eitc-…
Result of gutted IRS is a two-tiered tax system

Compare 99% compliance for ordinary Americans

To $750 tax bill for Donald Trump

🤞 come January, things will change

Given revenue needs, investmt in IRS shouldn't be where tax reform efforts end

But must be where they start

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More from @NatashaRSarin

Apr 9
New analysis from @The_Budget_Lab:

The IRS is entering into an agmt to share data about undocumented immigrants with ICE. Historically, the agency promised data would not be used in this way.

We estimate the govt will lose ~$300B in the next decade as a result.
Why? Today, undocumented immigrants pay about $66B in federal taxes, w/ about 2/3 as payroll taxes.

As a result of this agreement, this population will worry about tax data being weaponized – and could stop filing taxes and/or shift to work arrangements that won’t withhold.
Hard to know how much of a loss this will be. @The_Budget_Lab has a range depending on scope of behavioral adjustment: between ~$150B-$480B over the next decade.
Read 7 tweets
Oct 12, 2021
There is a whole lot of misinfo about the bank reporting proposals under consider, that @SecYellen clears up here:

One imp one: Those protecting $$ evaders push myth this proposal means IRS will see every transaction above $600 in all bank accounts

That is completely false.
Proposal under consideration actually adds a bit of addl info to existing reports that fin institutions *already provide* to IRS.

On TOTAL money flowing into accounts, and TOTAL money flowing out.

No personal transaction details whatsoever.
Why is this helpful?

IRS has third-party info on income sources accrue to American workers (wages, pension, benefits, etc.) And compliance is 95%+

In the absence of any info, evaders know that their underpayment is unlikely to be detected. So compliance under 50%
Read 4 tweets
Nov 16, 2020
Over the last decade, audit rates have fallen most for the very richest Americans.

The result?

Less tax revenue and a more unequal tax system.

My latest in @bopinion

bloomberg.com/opinion/articl…

A thread:
IRS has been gutted in the last decade, the result of a partisan attack on the agency.

Budget is down 15% in real terms, workforce down 20%

Attrition highest for revenue agents capable of examining complex returns of the wealthy--like @realDonaldTrump
Unsurprisingly, strapped for resources, IRS has been forced to pull back from examination scrutiny

Audit rates for those making $10M+ annually are down nearly 80%

EITC recipients less than half that!
Read 7 tweets

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