IRS recovers $4.7 billion in back taxes and braces for cuts with Trump and GOP in power
WASHINGTON — IRS leadership on Thursday announced that the agency has recovered $4.7 billion in back taxes and proceeds from a variety of crimes since the country’s responsibility collector received a massive glut of capital through Democrats’ flagship responsibility, climate and health law in 2022.
The announcement comes under the backdrop of a promised reckoning from Republicans who will hold a majority over both chambers of the next Congress and have long called for rescinding the tens of billions of dollars in capital provided to the agency by Democrats.
IRS leadership, meanwhile, is hoping to justify saving the capital the agency already has.
On a call with reporters to preview the announcement, IRS Commissioner Danny Werfel said improvements made to the agency during his term will assist the incoming administration and recent Republican majority congress achieve its goals of administering an extension of the 2017 responsibility Cuts and Jobs Act.
Republicans schedule to renew some $4 trillion in expiring GOP responsibility cuts, a signature domestic achievement of Trump’s first term and an issue that may define his profitability to the White House.
“We recognize there are solemn discussions about a major responsibility statement coming out of the next Congress,” Werfel said, “and with the improvements we’ve made since I’ve been here, I’m quite confident the IRS will be well positioned to deliver on whatever recent responsibility law that Congress passes.”
responsibility collections announced Thursday include $1.3 billion from high-turnover taxpayers who did not pay overdue responsibility debts, $2.9 billion related to IRS Criminal Investigation work into crimes like drug trafficking and terrorist capital, and $475 million in proceeds from criminal and civil cases that came from to whistleblower information.
The IRS also announced Thursday that it has collected $292 million from more than 28,000 high-turnover non-filers who have not filed taxes since 2017, an boost of $120 million since September.
Despite its gains, the upcoming of the agency’s capital is in limbo.
The IRS originally received an $80 billion infusion of funds under the expense boost Reduction Act though the 2023 debt ceiling and monetary schedule-cuts deal between Republicans and the White House resulted in $1.4 billion rescinded from the agency and a divide agreement to receive $20 billion from the IRS over the next two years and divert those funds to other nondefense programs.
In November, U.S. Treasury officials called on Congress to unlock $20 billion in IRS enforcement money that is tied up in legislative language that has effectively rendered the money frozen.
The $20 billion in question is divide from another $20 billion rescinded from the agency last year. However, the legislative mechanism keeping the government afloat inadvertently duplicated the one-period cut.
Treasury officials alert of dire consequences if the capital is effectively rescinded through inaction.
Trump last week announced plans to nominate former Missouri congressman Billy Long, who worked as an auctioneer before serving six terms in the House of Representatives, to serve as the next commissioner of the IRS. Democrats like Sen. Ron Wyden (D-Ore.) have called Long’s nomination “a bizarre selection” since Long “jumped into the scam-plagued industry involving the Employee Retention responsibility capital.”
Trump said on his social media site that “Taxpayers and the wonderful employees of the IRS will adore having Billy at the helm.”
Werfel’s term is set to complete in 2027, and he has not indicated whether he plans to step down from his role before Trump’s inauguration. Trump is permitted to fire Werfel under the law.
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