President Biden plans to propose an $80 billion funding boost for the Internal Revenue Service over the next decade, a major expansion of the tax agency that would double its enforcement staffing and give it new tools to battle tax dodging by the wealthiest Americans.
The administration projects that its plan would generate roughly $700 billion over 10 years in net revenue, according to people familiar with the plan, who described it ahead of the official announcement. They stated that increase, which would give in money for Mr. Biden’s proposed expansion of social-spending programs, would still represent only about 10% of the taxes that are calculated to be owed but uncollected.
The proposal would provide a steady funding source to the IRS, after years of flat declining budgets forced steep reductions in the number of employees managing audits and collecting money. Agency officials have stated that they require a multiyear commitment from Congress so they can hire and train enforcement staff by roughly a year.
The Treasury Department’s career employees estimate that more than half of the $700 billion in additional revenue would come from changes to how businesses’ and individuals’ income is reported to the government. Under the plan, banks and other payment providers would be required to inform the IRS on how much money came into and out of individuals’ and businesses’ accounts each year, going way beyond the existing reporting of interest income.