Report: IRS Has ‘No Records’ on Proposal to Increase Funding for More Agents

The exterior of the Internal Revenue Service building in Washington March 22, 2013. (Susan
Susan Walsh/AP

The Internal Revenue Service (IRS) reportedly has “no records” on a previous proposal to increase funding to add more agents and expand its authority over U.S. bank accounts with more than $600 a year in transactions.

Conservatives readied their battle stations in 2021 when President Joe Biden’s Build Back Better plan included a provision to require banks to give information to the IRS on accounts with $600 or more in annual transactions. The policy would have also applied to peer-to-peer apps like Venmo, CashApp, and Zelle.

At the time, Treasury Secretary Janet Yellen said the proposal would close a $7 trillion tax gap over the next decade.

“The proposal involves no reporting of individual transactions of any individual,” Yellen told CBS News. “The big picture is, look, we have a tax gap that over the next decade is estimated at $7 trillion. Namely, a shortfall in the amount the IRS is collecting due to a failure of individuals to report the income that they have earned.”

US Democratic presidential candidate Joe Biden speaks about on the third plank of his Build Back Better economic recovery plan for working families, on July 21, 2020, in New Castle, Delaware. (Photo by Brendan Smialowski / AFP) (Photo by BRENDAN SMIALOWSKI/AFP via Getty Images)

Joe Biden speaks on the third plank of his Build Back Better economic recovery plan for working families, on July 21, 2020, in New Castle, Delaware. (Photo by BRENDAN SMIALOWSKI/AFP via Getty Images)

Though the proposal, which would have increased IRS agents and cost taxpayers over $80 billion, was eventually abandoned, the Functional Government Initiative (FGI) recently discovered that the IRS has “no such records involving the request for more resources, new agents, or any analysis that would justify the controversial policy items.”

“The response from the IRS is not only surprising but also highly unusual for a large government agency requesting an additional $80 billion in taxpayer resources,” the FGI said in a press release. “Their response raises concerns about whether the IRS is behind an effort to withhold public records that could expose damaging internal reactions and analysis underlying the agency’s actions.”

“Other implications are that the agency was left out of the analysis and projections submitted by high-ranking political appointees, leaving the IRS to defend policies they had no part in constructing,” it continued. “Either way, this situation is not an example of a functional government.”

Several questions remain regarding the failed request. For instance, did the IRS conduct the initial analysis or was it an external agency? Was the policy discussed with the White House or the treasury? Most of all, why does no record exist?

Peter McGinnis, spokesman for FGI, said the almost non-existent paper trail for such a massive budget request and invasive proposal is both “astonishing and frankly unbelievable.”

“Given the congressional scrutiny and media attention on these proposals, one would think that the IRS conducted a thorough review before rolling it out,” said McGinnis. “Based on their response, the IRS essentially just told us that they had no hand in the review or implementation of a policy that would affect hundreds of millions of Americans.”

“This is exactly the type of government dysfunction Americans are fed up with,” McGinnis concluded.


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