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There’s nothing politicians love more than extra revenue without having to raise taxes. And at first glance, that’s what Internal Revenue Service Commissioner Chuck Rettig appeared to offer at a recent Senate Finance Committee hearing when he discussed the so-called “tax gap”: the difference between what taxpayers legally owe and what the IRS actually takes in. Unfortunately for President Joe Biden, attempts to take on the “tax gap” would probably yield far less revenue than he thinks.
Rettig’s testimony appeared to provide groundbreaking new information that the tax gap has reached $1 trillion, with major media outlets like The New York Times taking this statement as gospel even though it’s nearly three times what had been previously estimated by the IRS. Rettig’s statements were soon followed by a plan from Biden to raise $780 billion over the next decade by spending $80 billion on increased enforcement.
Third, the Biden Administration s $1.5 trillion budget for fiscal year (FY) 2022 also focuses on enhancing taxpayer compliance – including an additional $900 million for audits, as part of a 10.4 percent increase in the IRS budget. In addition to IRS spending, the discretionary spending proposal includes $191 million for the U.S. Department of the Treasury s Financial Crimes Enforcement Network (FinCEN) to create a database that tracks the ownership and control of certain companies and organizations. The FY 2022 budget will likely include additional proposals to address the tax gap.
Congressional Initiatives
A number of Senate and House members also have introduced initiatives relating to enhancing IRS compliance of large corporations and wealthy individual taxpayer. While not the prime focus given the Biden Administration s infrastructure proposals, some portions of the below proposals could become part of the legislative deal making.
$3000/$3600 Child Tax Credit: when will the monthly payments begin?
The IRS has doubled down on their commitment to begin sending payments associated with the enhanced child tax credit this July. Families could begin seeing up to $300 per child in monthly payments from the enhanced child tax credit starting this summer.
SCOTT OLSON
AFP
When the American Rescue Plan was passed in March, it included several measures to help struggling American families.
One of the measures that households began seeing immediately were the $1,400 stimulus checks of which around $386 billion worth have been distributed.
The $1.9 trillion covid-19 relief bill also includes an enhanced Child Tax Credit that will send parents
United States President Joe Biden will reportedly seek $80bn to strengthen US tax audit capabilities to help foot the bill for expanding paid leave for workers, childcare and education.
Biden’s American Families Plan, set to be unveiled before Congress on Wednesday, is expected to cost over $1 trillion and potentially as much as $1.8 trillion. The sweeping economic agenda could impact millions of Americans and help them better balance work and family life. The New York Times was the first to report on the details of the plan Tuesday, citing two people familiar with the proposal.
The administration reportedly hopes that its plan to boost the budget of the Internal Revenue Service (IRS) over the next decade will help fight tax evasion through audits of wealthy individuals and large corporations.