More money would be raised from increased auditing. Biden is proposing an infusion of $80 billion into the IRS to hire new specialized audit staff and improve technology systems. That funding is expected to raise nearly $320 billion in revenue, or $240 billion in net money after subtracting the initial investment, Treasury officials said during a call with reporters.
The additional funding would allow the IRS to add about 87,000 employees by 2031, roughly doubling the agency’s workforce, according to the report.
The Treasury estimates its proposals would raise $700 billion this decade and $1.6 trillion in the following 10 years. Outside scorekeepers have projected lower returns. The Penn Wharton Budget Model, for example, has estimated $480 billion over a decade.
1960s System
It’s unclear if the full $700 billion will count under congressional scorekeeping rules to offset the cost of the Biden plan. Treasury officials said on the call that the money raised from the plan would yield real dollars and that lawmakers in Congress should review their processes so that these dollars can count.
But the Treasury said its estimates are “conservative.” Some dynamics, like overhauling the IT systems and greater voluntary compliance due to higher audit likelihoods, are not factored into the total, the report said.
The Treasury made a detailed argument for overhauling the IRS’s outdated technology. The core tax-return processing system, which handles more than 150 million individual returns each year, was first designed in 1962 -- making it “one of the highest-risk systems in the federal government,” the Treasury said.
“The result today is decades of tax law written in a programming language that is no longer taught, a data platform that is highly complex to maintain, and an outdated system with a limited number of employees supporting it -- about half of whom are eligible to retire,” the report said.
This article was provided by Bloomberg News.