Not More, Better
Republicans on the committee seemed far less eager to increase IRS funding.
Adding 1,600 new agents and $3 billion annually to IRS collections would amount to just a 1% increase in overall taxes collected, said Rep. Kevin Brady of Texas, the leading Republican on the committee.
“Republicans support closing the tax gap with better customer service; smarter audits; improved IRS assessment of the gap; and capitalizing on our simpler, improved tax code,” Brady said.
The agency must also get more efficient at utilizing data before auditing taxpayers, he added.
“The way that the IRS currently estimates the tax gap comes at a huge personal cost to taxpayers,” Brady said, “requiring significant time, in-person meetings and tons of prep work. If the IRS is going to put taxpayers through that experience, it should outline a strategy on how it plans to use the information, in a timely manner, to close the tax gap.
“You cannot just audit your way out of the tax gap,” he added. “The solutions must be myriad.”
Lawmakers on both sides of the aisle wanted to close the gaps that may exist for the booming gig economy and independent contractors.
Said Brady: "Gig economy workers, such as folks who drive for Uber or use their home as an Airbnb, contribute greatly to our economy. But as [the inspector general for tax administration] recently discovered, there is greater risk of folks who participate in the gig economy of noncompliance.”
George said his office recommended to the IRS that the agency develop a strategic plan to address tax administration in the gig economy. The IRS agreed on its importance, but has yet to follow through or address the issue, he added.