Treasury Secretary Yellen And “High-End Compliance”

There is so much misinformation floating around.  Yesterday, August 14, 2022, a Congressman from South Dakota said on Meet the Press that his constituents questioned “why we want to have 87,000 new bureaucrats in the IRS out chasing down and trying to audit them.” 

That’s simply not the case.  In an August 10, 2022, letter to IRS Commissioner Charles Rettig, Treasury Secretary Yellen said she is directing “that any additional resources—including any new personnel or auditors that are hired—shall not be used to increase the share of small businesses or households below the $400,000 threshold that are audited relative to historic levels. … small businesses or households earning $400,000 per year or less will not see an increase in the chances that they are audited.” 

In her letter, Secretary Yellen clarified that additional resources should be applied toward “high-end compliance” noting that the top one percent of high-income filers are estimated to not be paying $160 billion in owed taxes each year.  Yellen explained: “This is challenging work that requires a team of sophisticated revenue agents in place to spend thousands of hours poring over complicated returns, and it is also work that has huge revenue potential: indeed, an additional hour auditing someone making more than $5 million annually generates an estimated $4,500 of additional taxes collected.”