“When you under-fund the IRS, it’s just a tax cut for tax cheats.” That’s what former IRS head John Koskinen told The New York Times last year in a discussion about the Biden administration’s plan to beef up the country’s beleaguered tax agency. This week, Koskinen joined with two other former IRS chiefs to express support for Democrats’ Inflation Reduction Act, which includes an additional $80 billion over nine years to enhance enforcement at the IRS.
On Thursday, Koskinen, who led the IRS in the Obama administration, released a joint letter expressing support for the proposed budget plan. He was joined by Fred Goldberg, who led the agency under President George H. W. Bush, and Charles Rossotti, who led the IRS under President Bill Clinton.
The former commissioners said the bill would provide a much-needed boost to the IRS, which “has shrunk to 1970s levels with technological infrastructure that is decades out-of-date and an audit rate that has dropped by 50 percent,” they wrote. “The sustained, multi-year funding contained in the reconciliation package is critical to help the agency rebuild. That will mean vastly improved services for taxpayers, who will be able to interact with a modernized IRS in a digital way, whose questions will be answered and issues resolved promptly and fairly, and who will find it simpler to get access to the benefits and credits to which they are entitled,” the commissioners added.
They also disputed Republican claims that the increased funding would be used by the agency to go after middle-class taxpayers and small businesses. “In fact, for ordinary Americans who already fulfill their tax obligations, audit scrutiny will decline, because the IRS will be better at selecting returns for examination,” they wrote. “This bill is about getting to the heart of the problem and pursuing high-end taxpayers and corporations who today illegally evade their tax obligations.”
Former Treasury secretaries join the chorus: Five former Treasury secretaries from both major parties issued a statement Wednesday expressing support for the Democratic bill.
“This legislation will help increase American competitiveness, address our climate crisis, lower costs for families, and fight inflation—and should be passed immediately by Congress,” said Robert Rubin, Larry Summers, Jacob Lew, Tim Geithner and Henry Paulson.
The former secretaries said the bill was “financed by prudent tax policy that will collect more from top earners and large corporations.” And they pushed back against the idea that the bill would raise taxes on middle-class households. “Taxes due or paid will not increase for any family making less than $400,000/year,” they wrote. “And the extra taxes levied on corporations do not reflect increases in the corporate tax rate, but rather the reclaiming of revenue lost to tax avoidance and provisions benefiting the most affluent.”