I have been saying that the IRS has been itching to go after small business. Well, the Congressional Budget Office (CBO) informed lawmakers that audits of taxpayers making under $400,000 accounts for about $20 billion in revenue for the Inflation 'Increasing' Act - in spite of their lies that nobody making under $400,000 would see any harm from this bill.
The CBO’s scored a Senate amendment proposed by Republican Idaho Sen. Crapo that would have prevented any additional IRS funds to audit taxpayers making less than $400,000 a year. The CBO says with this amendment, the Inflation Reduction Act would lose $20 Billion dollars in revenue. The democrats blocked it from being added.
Of course, this CBO score was emailed to Senate offices this morning after the Senate vote on the IRA.
Republicans on the House Ways and Means committee say that this proves that the CBO — and Democrats counting on CBO estimates for how much money increased IRS audits would raise — proves that about $20 billion dollars in revenue will be raised from increasing audits on anyone making less than $400,000. Republicans say this directly contradicts the President and other Democrats’ promise that no one in the middle and lower income brackets would get hit with increased audits.
Here is what we will probably see with the passage of this bill for people making less than the $400,000 they keep talking about:
- The figure is at least $20 billion. This amount is probably higher.
- This $20 billion is on top of the existing number they are pulling from this income group currently.
- According to official “tax gap” estimates, 78%-90% of “under-reported” tax dollars come from families making less than $200k. A mere 4% from those making $500,000 or more.
- Keep in mind: Democrats have been relying on CBO for an estimate of how much they’d collect. CBO has been clear that it’s “non-scorable” in asterisks at the bottom of their estimates – but Democrats have counted it anyway. So when they talk about “non-scorable” revenue, that’s what they’re referring to.
If you are in business for yourself, make sure you have a tax preparer that knows what they are doing!