IRS Revenue Boost From Stronger Enforcement Is Scaled Back in CBO Estimate

Income limits on household tax audits, staffing challenges are projected to trim what IRS can collect by $23 billion

By Richard Rubin of The WSJ. Excerpts:

"Income limits on household tax audits and staffing challenges will reduce by $23 billion what the Internal Revenue Service is projected to collect from its expanded enforcement operations, according to the Congressional Budget Office. 

The CBO outlined the revised estimate Thursday in a letter issued by its director, adjusting the projected 10-year revenue generated by the nearly $80 billion in IRS spending included in the law President Biden signed last week. The 10-year funding boost is now estimated to raise $180.4 billion, down from $203.7 billion, according to the CBO. 

Treasury Department officials have long said the real numbers would be far higher; a spokeswoman declined to comment Thursday afternoon."

"Those restrictions will make the IRS less effective at policing the tax system, according to CBO."

"CBO now projects that the IRS will hire more slowly than had been expected."

"Overall, despite Ms. Yellen’s directive, taxpayers making under $400,000 will still pay a “small fraction” of new revenue gleaned from tougher enforcement, according to CBO"