If there is a simpler and more effective way of doing something, that’s how it should be done. Republicans put this principle into practice five years ago with our pro-growth tax reform that simplified the tax code, lowered rates, and reduced South Dakotans’ tax bills. The fact that most South Dakotans were able to keep more of their hard-earned paychecks while the federal government has collected record-high revenues helps prove that the Republican plan worked.
President Biden and congressional Democrats have pursued a different approach, one that is all but certain to add new complexity and burdens for taxpayers, especially their experience with the IRS. Democrats recently passed the so-called “Inflation Reduction Act,” which included an unprecedented and unnecessary $80 billion in additional funding for the IRS, an amount six times greater than the agency’s current budget. Democrats intend to use some of the funds to hire as many as 87,000 new IRS employees.
Although there are a number of ways to make the IRS more efficient and accountable, the agency’s recent influx of cash is unlikely to do so given that more than half of the funding is directed toward enforcement, including audits, and only four percent goes toward improving customer service. If you made one of the 250 million phone calls to the IRS that employees failed to answer last year, or if you dealt with a delayed refund from the agency, you probably agree a stronger emphasis on customer service is warranted.
The lack of accountability for recent mismanagement of taxpayer data at the IRS is also greatly concerning. In the last two years alone, the IRS has inadvertently posted confidential information from 120,000 taxpayers on its website, destroyed 30 million unprocessed tax documents, and had troves of private tax information end up in the hands of the left-leaning news site ProPublica. These incidents are only a part of the mismanagement that has helped define the IRS in recent years, punctuated by little to no accountability from Democrats in Congress or the White House.
I’m skeptical that a supersized IRS won’t exacerbate many of these problems while also increasing audits of middle-income Americans and small business owners. For these reasons, I recently introduced legislation with my Republican colleagues on the Senate Finance Committee to give Congress a direct say in how these funds are used. My bill freezes access to the funds – other than those dedicated to taxpayer services – until the IRS submits a coherent plan to Congress, which would be empowered to reject it. If the agency fails to meet deadlines, funding will be automatically rescinded. If there’s one way to make a federal agency shape up, it’s by tightening its purse strings.
Common-sense principles like efficiency, accountability, and responsiveness should guide improvements for taxpayers. To this end, Sen. Susan Collins (R-Maine) and I crafted a bill that would require the IRS to meet certain customer service standards before the agency can hire new enforcement agents with these funds. And I worked with Sen. Mike Crapo (R-Idaho) on a bill to protect taxpayers earning less than $400,000 per year from increased audits. Without the protection of law, ramped-up audits are sure to hit small businesses and middle-income taxpayers.
My Republican colleagues and I share a firm but simple view that the IRS needs to do better, not grow bigger. I will continue working to make measurable improvements to the IRS, hold the agency accountable for its actions, and ensure South Dakotans are able to keep more of their hard-earned paychecks without undue interference from bureaucratic red tape.