The Chairman’s Report June 7th, 2024

Commissioner Werfel demands more money

 

• Commissioner Werfel told legislators that the IRS faces financial collapse. 
• “Resources are limited,” he said, and the agency “will likely use them entirely before the funding expires.” 
• In other words, the IRS doesn’t think the $60 billion bonus it received from Congress in 2022 is enough, though it was supposed to last through 2031.
• Instead of explaining where the money went, Mr. Werfel asked the House to look the other way and grant his team another massive funding boost, this time through 2034. 
• The extended bonus he seeks would bring total supplementary funding to $104 billion over 10 years.
• Mr. Werfel also hinted at mass layoffs in the customer service area. 
• “The vast majority of taxpayers would be unable to reach an IRS representative for assistance,” Mr. Werfel warned. 
• Missing from the IRS’s request was an accounting of how its last round of funding ran out so quickly. The money it received in the 2022 Inflation Reduction Act (IRA) was meant to fund a strategic overhaul, but not much of the plan has been carried out.  Just where did this money go?
• By December the IRS said it had almost 700,000 returns still waiting to be processed, most of which were filed earlier last year.
• Also, the IRS went ahead and launched a pilot this year, spending about $114 million for a platform currently serving only 140,000 filers.
• Despite his pleas, Mr. Werfel is actually making a strong case for stripping the remainder of billions in funding authorized by Congress instead of adding another cent of additional cash.

• The Internal Revenue Code is a complex and incomprehensible mishmash of words and rules that no one understands.
• In 2022, 162,037,000 individual 1040 returns were filed.
• During the 2021 tax season, the IRS received 282 million phone calls from taxpayers but only answered 11% of those calls.
• The overall audit rate for the past two years is not known, but the most recent numbers show it is less than 0.4%.
• The level of illegal income tax evasion now stands at over $1 trillion a year and it’s getting worse by the day.
• Evaders go to great lengths to appear legitimate.  Consequently, the only way to catch the cheaters is to assume that everyone is cheating and aggressively audit the 80% of us who are trying to calculate and pay our taxes honestly.

• The economy and tax revenues will grow much more rapidly.  
• Budget cuts are still required but will not need to be as painful.
• Interest costs on the National Debt will come down and again be less than we pay for defense spending.
• Rates for mortgages, car loans and credit card loans will quickly go down.
• All Americans will be more prosperous and confident about their future.
• Social Security and Medicare will be fully solvent, and no senior will worry about having their retirement income reduced because of the inability to finance the National Debt.

• Vote for the present income/payroll tax system or for the FAIRtax.
• Support the corrupt income tax and the IRS or eliminate it.  It can’t be any simpler than that.
• Hide the true cost of their government or pass the FAIRtax and show everyone the true cost of government on each retail receipt.
• Support the largest transfer of power from government to the people, the FAIRtax, or not.