Suzanne Potter, producer/reporter, California News Service, a bureau of Public News Service.
The Internal Revenue Service will be in the crosshairs in the second Trump administration. That’s because the president-elect’s choice to run the agency has called for it to be abolished.
Former Missouri Congressman Billy Long, Trump’s recently announced pick for IRS Commissioner, cosponsored a bill to get rid of the IRS and implement a national sales tax in its place.
Ryan Polk, assistant professor of accountancy at Clemson University, said if the new administration starts laying off IRS workers, taxpayers and businesses in California and across the U.S. would see significant delays.
“When you defund or reduce the funding at the IRS, you run the risk of a less helpful IRS,” Polk contended. “The average, everyday taxpayer might be worse off when they have a question.”
IRS recent improvements
During the Biden administration, the IRS got an $80 billion boost in funding from the Inflation Reduction Act. The agency used it to overhaul old computer systems and add agents, raising its phone call response rate from an abysmal 15% to over 80%. The agency also added a portal allowing people to upload documents instead of mailing them.
The IRS also debuted Direct File, a system allowing people to file federal income taxes without paying a tax preparer. It’s available in California and 22 other states. Polk argued the new Congress should understand cutting the IRS budget would limit its ability to pay for the administration’s priorities.
“Just last year, they audited taxpayers and collected 100 additional billion dollars that wouldn’t otherwise have been collected,” Polk pointed out. “That’s a pretty significant amount of money. It can go a long way, depending on regardless of the government program or tax cut you’re trying to get through.”
The IRS said it collects $100 in revenue for every 34 cents it spends on enforcement. Conservative critics of the agency alleged it has been weaponized, with some audits targeted for political reasons.
