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Democratic economic package adds 87K new IRS agents

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(NewsNation) — A large cash infusion for the Internal Revenue Service is part of the economic package Democrats are working to push through Congress before their August break.

Under a deal worked out by Senate Majority Leader Chuck Schumer and West Virginia Sen. Joe Manchin, the Inflation Reduction Act of 2022 would spend an extra $79.6 billion on the agency over the next 10 years. 

The added cash is expected to go toward hiring 87,000 new IRS agents, roughly doubling the agency’s size. The IRS says the money is expected to go toward efforts to crack down on wealthy tax evaders and to modernize its technology.

Democrats say the IRS investment is needed to ensure that corporations and wealthier Americans pay what they owe in taxes.

“This will give us the chance to raise the revenue from wealthy tax cheats who are getting out of paying what they owe,” said Senate Finance Committee Chairman Ron Wyden, D-Ore.

But Republicans are warning it will lead to increased scrutiny of small business owners and IRS audits would affect more people.

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A Wall Street Journal editorial argues the move targets the middle- and upper-middle class “because that’s where the money is.”

IRS commissioner Charles P. Rettig told Congress on that the agency would not increase audits of households earning less than $400,000, according to the New York Times.

The Congressional Budget Office projects the plan will generate an additional $203.7 billion in revenue for the federal government, for a net gain of more than $124 billion.

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Treasury Department estimates indicate that IRS enforcement could raise a net $400 billion over the next decade, while improving customer service such that the agency could go from answering just 15% of its phone calls to all of them, according to a senior administration official who spoke to The Associated Press.

The bill has the backing of Sen. Kyrsten Sinema, D-Ariz., a centrist seen as the pivotal vote in the 50-50 chamber, and appears on track toward Senate votes this weekend.

The Associated Press contributed to this report.