Biden Aims to Recover $700B in Unpaid Taxes

President Biden intends to give the Internal Revenue Service an extra $80 billion and more authority over the next 10 years as he looks for ways to raise money to pay for his economic plan. Biden plans on using the recouped tax funds to pay for the cost of the American Families Plan. This plan is expected to cost at least $1.5 trillion, which will fund universal prekindergarten, federal paid leave, affordable childcare, free community college, as well as tax credits to fight poverty.

Biden’s plan calls for tax increases, including raising the rate that people who earn more than a million a year pay on profits earned from the sale of stocks or other assets, as well as raising the top marginal income tax rate for wealthy Americans. Biden also wants to raise the rate on income for those who earn more than a million a year from stock dividends. Officials say that with an aggressive crackdown on tax avoidance by corporations and the wealthy, the IRS could recover $700 billion over 10 years. This proposal of $80 billion for funding also increases the original IRS funding by two-thirds.

Many administrations have discussed trying to close the tax gap, which is the amount of money that taxpayers owe but is not collected each year. In early April, the head of the IRS, Charles Retting, told congress that the agency does not have the resources necessary to catch tax cheats, which cost the government about $1 trillion a year. He also says that the agency’s funding has failed to keep up with inflation. Faced with a lack of resources and budget cuts, audits to wealthy taxpayers have declined over the years. This may change soon.

Talley’s team of tax professionals provide comprehensive tax compliance and consulting services so you can preserve, enhance, and pass on the assets and wealth to the next generation. We welcome the opportunity to discuss the current options available for you. For more information, contact us today.

Archives