IRS to detail how it will spend $80 billion funding bump

The IRS will soon reveal exactly how it plans to spend the considerable funds allocated to the agency in the Inflation Reduction Act, which assigned the tax collectors an additional $80 billion.

Treasury Secretary Janet Yellen announced that the agency would unveil its plans this week while swearing in IRS commissioner Daniel Werfel on Tuesday, The Hill reported. The agency has already announced a general breakdown of how it will spend the funds.

It has assigned $3.1 billion to answer the phones, $4.8 billion to purchase new technologies, $25.3 billion for operations, and $45.6 billion for audits. The IRS plans to spend the money over 10 years. A more detailed breakdown is forthcoming.

"These additional resources will help us peel back complex corporate structures and large taxpaying entities — and make sure that they pay what they owe," Yellen said. "As I’ve said before, I have directed that these resources will not be used to increase the audit rate for small businesses and households making under $400,000 a year, relative to historical levels."

The $740 billion Inflation Reduction Act allocated funding for the agency to hire 87,000 new agents, to the consternation of Republicans who have voiced concerns the agency will target middle income Americans. The GOP-led House in February voted to repeal the act's funding to the IRS, but the motion has not cleared the Senate.

Advocates of the funding have argued that additional agents are needed to close the "tax gap," the difference between the amount of taxes owed and the amount collected. Between 2017 and 2019, that amount stood at an estimated $470 billion, The Hill reported.

The Biden administration has asserted that the audit rate will not increase for individuals earning less than $400,000 per year.

Ben Whedon is an editor and reporter for Just the News. Follow him on Twitter.