AP FACT CHECK: GOP Distorts Budget Act Impact on IRS, Taxes – The Associated Press – en Español | Vette Leader

Republican politicians and candidates distort like great economic law Passed by the Senate over the weekend, the bill would reform the IRS and affect taxes for the middle class.

The “Inflation Reduction Law”.‘, which awaits a House vote after passage in the Senate on Sunday, would increase the ranks of the IRS, but it would not create a mob of armed auditors bent on harassing middle-class taxpayers, some Republicans claim.

While experts say corporate tax hikes could indirectly weigh on middle-class people, the legislation doesn’t support claims that they will face higher taxes.

A look at some of the claims about a $740 billion package that emerged from a deal negotiated by Senate Majority Leader Chuck SchumerDN.Y., and Sen. Joe Manchin, DW.Va.:

KEVIN MCCARTHY, MINORITY LEADER, R-CALIF.: “Are you making $75,000 or less? The Democrats’ new army of 87,000 IRS agents will come for you — with 710,000 new audits for Americans making under $75,000.” — Tweet Tuesday.

Sen. TED CRUZ, R-TEXAS: “Manchin-Schumer Act will create 87,000 new IRS agents to target normal, everyday Americans.” – Friday tweet.

THE FACTS: This is misleading. Last year, before the bill came out, the Treasury Department had proposed a plan to hire about that many IRS staffers over the next decade if it got the money. The IRS will release final figures for its hiring plans in the coming months, according to a Treasury Department official. But those employees won’t all be hired at the same time, they won’t all be chartered accountants and many will replace employees who are expected to quit or retire, experts and officials say.

The IRS currently has about 80,000 employees, including clerks, customer service representatives, law enforcement officers, and others. According to the IRS, the agency has lost about 50,000 employees over the past five years due to attrition. More than half of the IRS employees who work in enforcement are currently eligible for retirement, said Natasha Sarin, the Treasury Department’s adviser on tax policy and enforcement.

Budget cuts, demanded primarily by Republicans, have also reduced the ranks of correctional staff, which has decreased by around 30% since 2010, although the number of filing documents has increased. The IRS-related money in the Inflation Reduction Act is intended to boost efforts against high-end tax evasion, Sarin said.

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The nearly $80 billion for the IRS in the bill will also pay for other improvements like overhauling the agency’s technology, said Janet Holtzblatt, a senior fellow at the Tax Policy Center and a former Treasury Department official.

The Treasury Department says it will hire experienced accountants and staff who will improve taxpayer services, and audit rates for those earning less than $400,000 are not expected to increase from historical norms.

So that’s a far cry from hiring 87,000 “agents” to go after average people in the United States, as the GOP claims. In any case, the bill does not provide a mandate to hire that many people.

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REP. TROY NEHLS, R-TEXAS: “Americans demanded lower inflation and Democrats gave us an armed IRS shadow army to spy on your bank accounts.” – Sunday tweet.

REP. MARJORIE TAYLOR GREENE. R-Ga.: “It’s going to hire 87,000 new IRS agents and it’s going to — as with guns, you know, Democrats are always angry about guns — arm 70,000 of those IRS agents.” — at the Conservative Political Action Conference, in a Interview with the conservative Canadian news magazine The Post Millennial.

THE FACTS: This is wrong. The bill will not create such an army, officials and experts say. Only some IRS employees working on criminal investigations carry firearms as part of their work.

A division of the IRS called Criminal Investigation serves as the agency’s law enforcement branch. His agents, who work on issues such as seizing illegal cryptocurrencies and assets from Russian oligarchs, carry guns, Sarin said.

According to agency records, just over 2,000 such special agents were working with the IRS as of 2021. The industry will get money from the Inflation Reduction Act, but the bulk of the dollars will go elsewhere, Sarin says.

The bill does not provide money specifically for large numbers of armed IRS employees.

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ADAM LAXALT, NEVADA SENATE CANDIDATE, criticized his opponent, Democratic Senator Catherine Cortez Masto: “.@CortezMasto just voted to increase taxes on Nevadans who only make $30,000 a year.” – Sunday tweet.

THE FACTS: Contrary to what Laxalt claims, nothing in the law increases taxes for people earning less than $400,000. There are no individual tax rate increases for anyone in the bill, experts say.

However, it is possible that the bill’s new corporate taxes, including a minimum tax of 15% for large companies, could have indirect economic effects. A report by the Joint Committee on Taxation says some people earning less than $400,000 could see such an impact.

“Economists largely agree that corporate taxes are not only borne by companies, but also by shareholders and employees,” said Holtzblatt. “Some of the tax imposed on the company could end up being shifted to workers in the form of lower wages.”

Garrett Watson, senior policy analyst at the Tax Foundation, added: “Distinguishing whether lower after-tax income is due to a direct tax increase or an indirect impact can be an indiscriminate distinction for many households.”

Still, the bill’s supporters didn’t vote for tax increases for people earning $30,000, as Laxalt claimed.

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Associated Press writer Karena Phan in Los Angeles contributed to this report.

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EDITOR’S NOTE – A look at the veracity of politicians’ claims.

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