• Tue. Feb 27th, 2024

Scrap The IRS? No Way, Larry Summers Says. 5 Reasons It Needs A Boost — One Involves Trump

ByShanthi Rexaline

Jan 16, 2023
Scrap The IRS? No Way, Larry Summers Says. 5 Reasons It Needs A Boost — One Involves Trump

Certain Republicans have been calling for the abolition of the Internal Revenue Service (IRS).

The 160-year-old federal agency, which oversees federal tax collection in the U.S. and implements tax laws, has been recently plagued with issues, including a reduction of workforce and budget constraints.

The current moment is the most important for the U.S. tax administration, former U.S. Treasury Secretary Lawrence Summers said in a Washington Post op-ed he co-authored with Natasha Sarin, also a former Treasury official.

See Also: Biden Vows To Veto Bill To Abolish IRS

Summers and Sarin offered some perspectives about the IRS to lawmakers, who would shape the agency in the future and approve its budget.

  1. Under-Resourced: Despite the $80 billion provision for IRS under the Biden administration’s 2022 Inflation Reduction Act, the agency is in much greater danger of being under-resourced, the co-authors said. To illustrate the point, they noted that JPMorgan Chase & Co., serving half as many as IRS, spends 28 times more annually. The federal agency has fewer field agents to do complex tax examinations now than at any time since World War II, they added.
  2. Payoff Enormous: Summers and Sarin cite recent research showing that successful audit activity raises future collections from taxpayers, who face enforcement activity. The payoff for investment in tax collection, therefore, is enormous, they said.
  3. Ensures Fairness: The former Treasury officials are of the view that improvement in tax administration will promote fairness. They noted that the most privileged Americans accrue income in opaque ways not subject to reporting, resulting in a large percentage of the tax gap. A crucial priority of the IRS should be to ensure financially sophisticated taxpayers meet their obligations, which require greater use of data science, they said.
  4. Setting Right Inadequacies: Obvious flags went unheeded in former President Donald Trump’s taxes, primarily because a single agent was largely taking care of the complex case, Summers and Sarin said. The IRS has asserted that it did not have the necessary resources to do the work, they noted.

See Also: How To Calculate Estimated Taxes

Gaining People’s Confidence: “Enhanced enforcement must never compromise strict adherence to the Taxpayer Bill of Rights,” Summers and Sarin said. Improving customer service is important, they said, adding that only 13% of the calls made to the IRS were answered in 2022, which is unacceptable. In the years ahead, IRS should not be distracted from its core mission of “providing America’s taxpayers top-quality service and enforce law with integrity and fairness to all, they added.

Read next: Larry Summers Says Fed’s Job ‘Much, Much Closer To Being Done,’ But ‘It’s A Little Bit Premature’ To Pause



Image and article originally from www.benzinga.com. Read the original article here.