Authored by Tom Ozimek via The Epoch Times (emphasis ours),
The amount of taxes collected from Americans under President Joe Biden has soared compared to former President Donald Trump’s tenure, while tax enforcement has also risen, an analysis of Internal Revenue Service (IRS) data shows.
The IRS collected a total of $4.9 trillion in taxes for fiscal year 2022 (Oct. 1, 2021 to Sept. 30, 2022), according to the IRS’ newly released Data Book. At the same time, the IRS issued nearly $642 billion in refunds last year, putting the net amount of taxes collected at around $4.26 trillion.
By comparison, in fiscal year 2020, Trump’s final year in office, the IRS’ gross tax collections were $3.5 trillion. With nearly $736 billion in refunds, that puts the net total taxes collected at around $2.76 trillion, or around 35 percent less than during Biden’s second year in office.
For fiscal year 2021, Biden’s first year in office, the IRS’ gross tax collections amounted to $4.1 trillion. When subtracting the $1.1 trillion in refunds, that put the net total at $3 trillion, or 8 percent higher than during Trump’s final year in the White House.
Tax enforcement, too, has accelerated under Biden. Using the number of tax returns examined as a proxy for enforcement, there was a steady decline under Trump, with a recent low of around half a million in 2020. That figure jumped to around 750,000 in 2021 and, in 2022, it remained at roughly the same level.
IRS Commissioner Danny Werfel said in an introduction to the 2022 Data Book that the agency’s commitment to maintaining a “visible, robust tax enforcement presence” is “strong.”
“During FY 2022, we continued to develop and utilize innovative approaches to better understand, detect, and resolve potential noncompliance,” Werfel said, adding that this includes “leveraging new technology and data analytics.”
“Our comprehensive and coordinated enforcement strategy has shown success,” he added, presumably referring to the rise in the amount of tax collection and the boost in enforcement.
Werfel added that the IRS’ work to transform itself into a “stronger, more modern” organization continued in 2022 and that he’s “confident this journey will pay significant dividends over time.”
The agency recently received an $80 billion funding boost, with part of the funds going to hiring more staff, including in areas of tax enforcement. This has fueled concerns about an increase in tax audit rates among lower and middle income Americans, which the IRS has said repeatedly would not be the case.
The IRS recently released its strategic operating plan (pdf), in which it identified certain transactions as being at high risk of noncompliance and vowed to ramp up enforcement in some areas.
In a press release accompanying the release of the 2022 Data Book, the IRS said it would target its enforcement efforts at high-income and high-wealth individuals, complex partnerships, and big corporations.
“The IRS has no plans to increase the audit rate for households making less than $400,000,” the agency stated.
As the IRS has increased the amount of taxes it collects from Americans, however, the share of people saying that it’s “not at all acceptable” to cheat on income taxes has fallen sharply.
From 2021 to 2022, the share of Americans saying that it’s “not at all acceptable” to cheat on taxes fell from 88 percent to 84 percent, the lowest reading in six years.
Enforcement Crackdown
The IRS said in the plan that it would increase enforcement regarding digital asset transactions and certain other types of transactions.
“The IRS tracks many known, high-risk issues in noncompliance, such as digital asset transactions, listed transactions, and certain international issues. These issues arise in multiple taxpayer segments, and data analysis show a higher potential for noncompliance,” the IRS wrote.
“We will prioritize resources to increase enforcement activities, including criminal investigation as appropriate.”
The tax agency stated that it will develop an information platform to support digital asset reporting and analytics tools with the aim of bolstering digital asset compliance.
Digital assets include convertible virtual currency, cryptocurrency, stablecoins, non-fungible tokens (NFTs), and other digital representations of value, according to the IRS.
Digital assets are considered property by the IRS, which requires taxpayers to report taxable gains or losses from transactions involving such assets.
‘Soft Notice’ Instead of Tax Audits
Although the IRS vowed to ramp up enforcement of certain transactions and said it’s planning to get tough on wealthier tax dodgers, it stated that it would soften its enforcement efforts for ordinary filers.
Authored by Tom Ozimek via The Epoch Times (emphasis ours),
The amount of taxes collected from Americans under President Joe Biden has soared compared to former President Donald Trump’s tenure, while tax enforcement has also risen, an analysis of Internal Revenue Service (IRS) data shows.
The IRS collected a total of $4.9 trillion in taxes for fiscal year 2022 (Oct. 1, 2021 to Sept. 30, 2022), according to the IRS’ newly released Data Book. At the same time, the IRS issued nearly $642 billion in refunds last year, putting the net amount of taxes collected at around $4.26 trillion.
By comparison, in fiscal year 2020, Trump’s final year in office, the IRS’ gross tax collections were $3.5 trillion. With nearly $736 billion in refunds, that puts the net total taxes collected at around $2.76 trillion, or around 35 percent less than during Biden’s second year in office.
For fiscal year 2021, Biden’s first year in office, the IRS’ gross tax collections amounted to $4.1 trillion. When subtracting the $1.1 trillion in refunds, that put the net total at $3 trillion, or 8 percent higher than during Trump’s final year in the White House.
Tax enforcement, too, has accelerated under Biden. Using the number of tax returns examined as a proxy for enforcement, there was a steady decline under Trump, with a recent low of around half a million in 2020. That figure jumped to around 750,000 in 2021 and, in 2022, it remained at roughly the same level.
IRS Commissioner Danny Werfel said in an introduction to the 2022 Data Book that the agency’s commitment to maintaining a “visible, robust tax enforcement presence” is “strong.”
“During FY 2022, we continued to develop and utilize innovative approaches to better understand, detect, and resolve potential noncompliance,” Werfel said, adding that this includes “leveraging new technology and data analytics.”
“Our comprehensive and coordinated enforcement strategy has shown success,” he added, presumably referring to the rise in the amount of tax collection and the boost in enforcement.
Werfel added that the IRS’ work to transform itself into a “stronger, more modern” organization continued in 2022 and that he’s “confident this journey will pay significant dividends over time.”
The agency recently received an $80 billion funding boost, with part of the funds going to hiring more staff, including in areas of tax enforcement. This has fueled concerns about an increase in tax audit rates among lower and middle income Americans, which the IRS has said repeatedly would not be the case.
The IRS recently released its strategic operating plan (pdf), in which it identified certain transactions as being at high risk of noncompliance and vowed to ramp up enforcement in some areas.
In a press release accompanying the release of the 2022 Data Book, the IRS said it would target its enforcement efforts at high-income and high-wealth individuals, complex partnerships, and big corporations.
“The IRS has no plans to increase the audit rate for households making less than $400,000,” the agency stated.
As the IRS has increased the amount of taxes it collects from Americans, however, the share of people saying that it’s “not at all acceptable” to cheat on income taxes has fallen sharply.
From 2021 to 2022, the share of Americans saying that it’s “not at all acceptable” to cheat on taxes fell from 88 percent to 84 percent, the lowest reading in six years.
Enforcement Crackdown
The IRS said in the plan that it would increase enforcement regarding digital asset transactions and certain other types of transactions.
“The IRS tracks many known, high-risk issues in noncompliance, such as digital asset transactions, listed transactions, and certain international issues. These issues arise in multiple taxpayer segments, and data analysis show a higher potential for noncompliance,” the IRS wrote.
“We will prioritize resources to increase enforcement activities, including criminal investigation as appropriate.”
The tax agency stated that it will develop an information platform to support digital asset reporting and analytics tools with the aim of bolstering digital asset compliance.
Digital assets include convertible virtual currency, cryptocurrency, stablecoins, non-fungible tokens (NFTs), and other digital representations of value, according to the IRS.
Digital assets are considered property by the IRS, which requires taxpayers to report taxable gains or losses from transactions involving such assets.
‘Soft Notice’ Instead of Tax Audits
Although the IRS vowed to ramp up enforcement of certain transactions and said it’s planning to get tough on wealthier tax dodgers, it stated that it would soften its enforcement efforts for ordinary filers.
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