The Inflation Reduction Act That Was Passed Over the Weekend

The Inflation Reduction Act, H.R. 5376, which in its larger, original version was known as Build Back Better bill has gone to the President for his signature.

The bill under both the House and the Senate was passed under the Reconciliation Act which meets a simple majority and was passed along the Democratic party lines.

In the bill, the Act is supposed to raise an estimated $124 billion in revenue. I’ve mentioned time and again that the IRS is the only way to get revenue into the government coffers and that is why Collections and enforcement is being increased even before this bill was passed.

Here’s the breakdown for the Internal Revenue Service’s budget authority through fiscal 2031 (by function and amount):

  • Enforcement will increase by 69% to $111.7 billion
  • Operations support by 53% to $72.9 billion
  • Taxpayer services by 9% to $36.8 billion
  • Business systems modernization by 153% to $7.8 billion

— for a total of $229.2 billion

Auditors must have a close rate that is substantial to expend $111.7 billion. Therefore, the large hiring push. Even through attrition, their goal to hire 87 million employees is a stretch. That is more than the 2 million active-duty personnel that the Defense and Military statistic show.

I hope that Operations support goes towards resolving the over 20 million pieces of mail which still remain unopened since 2020. Taxpayer Services needs people to answer the phones and open Taxpayer Service Centers at District offices that have been shuttered since 2020. And the COBAL/FORTRAN based systems are so antiquated that the Service is hard-pressed to find programmers who know the language. This is only one of the systems that the Service uses and why taxpayers and Tax Resolution Professionals (I’m not talking about the TV ad guys; they are not staffed by 100% licensed people) have difficulty correcting the false payment due notices that went out this spring (CP14).

More later this week — stay tuned as there were over 700 pages to the bill and a great deal of pork to wade through.

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