Bill Overview
Title: Family and Small Business Taxpayer Protection Act
Description: This bill rescinds unobligated amounts appropriated to the Internal Revenue Service by the Inflation Reduction Act of 2022 for its enforcement and other activities.
Sponsors: Rep. Smith, Adrian [R-NE-3]
Target Audience
Population: Families and small business owners subject to IRS enforcement
Estimated Size: 50000000
- The bill focuses on rescinding funds appropriated to the IRS specifically for enforcement activities, which suggests it aims to reduce audits or enforcement actions.
- Rescinding IRS funding for enforcement could reduce the number of audits on small businesses and families, which are often perceived to be targets of increased enforcement due to the complexity of their tax filings and limited resources to contest or negotiate settlements.
- Small businesses collectively contribute a significant portion of tax revenue in many countries, including a substantial number in the U.S.
Reasoning
- The policy aims to cut funding allocated for IRS enforcement by rescinding $1.5 billion in the first year, which impacts how the IRS conducts audits and enforcement, possibly leading to fewer audits.
- Considering the population of small business owners and families subjected to these audits, they may experience reduced stress and indirect savings due to the lower likelihood of enforcement actions.
- The reduction in enforcement funding might have varying impacts based on individual circumstances, such as the complexity of their tax situations and previous experiences with IRS audits.
- While directly affected small businesses and families could benefit, individuals more concerned with tax compliance or who benefit from a well-funded IRS may not perceive positive impacts.
- Most interviews focus on demographics likely to interact with IRS enforcement, such as small business owners, but also include those outside the target to assess varied perspectives.
Simulated Interviews
Owner of a small cafe (New York, NY)
Age: 45 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 5.0 years
Commonness: 10/20
Statement of Opinion:
- I believe this policy will give small business owners like me some breathing room by reducing unnecessary audits.
- I've spent a lot of time worrying about IRS audits, which affects my focus on growing my business.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 8 | 6 |
| Year 5 | 8 | 6 |
| Year 10 | 7 | 6 |
| Year 20 | 6 | 6 |
Freelance Graphic Designer (Austin, TX)
Age: 34 | Gender: male
Wellbeing Before Policy: 5
Duration of Impact: 2.0 years
Commonness: 8/20
Statement of Opinion:
- I'm constantly worried about making mistakes on my taxes. If enforcement is scaled back, that's one less thing to stress over.
- I'm generally against cutting resources for the IRS because it may lead to larger tax evasion issues.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 6 | 5 |
| Year 3 | 5 | 5 |
| Year 5 | 5 | 5 |
| Year 10 | 5 | 5 |
| Year 20 | 5 | 5 |
Accountant (Los Angeles, CA)
Age: 50 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 3.0 years
Commonness: 9/20
Statement of Opinion:
- My clients will feel more secure from the policy, but it could lead to less compliance overall.
- Proper enforcement is necessary to ensure fairness in tax contributions.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 7 |
| Year 3 | 7 | 7 |
| Year 5 | 6 | 7 |
| Year 10 | 6 | 7 |
| Year 20 | 6 | 7 |
Small farm owner (Boise, ID)
Age: 29 | Gender: male
Wellbeing Before Policy: 4
Duration of Impact: 7.0 years
Commonness: 6/20
Statement of Opinion:
- With reduced IRS enforcement, I can invest more in my farm rather than saving for potential audits.
- I'm concerned how this may unbalance the system, letting larger entities evade taxes.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 4 |
| Year 2 | 6 | 4 |
| Year 3 | 6 | 4 |
| Year 5 | 7 | 4 |
| Year 10 | 7 | 4 |
| Year 20 | 6 | 4 |
IT Consultant (Miami, FL)
Age: 39 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 4.0 years
Commonness: 12/20
Statement of Opinion:
- A reduction in enforcement will lower the stress associated with tax processes.
- I'm worried that the wealthy will benefit more from less scrutiny than the rest of us.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 7 | 6 |
| Year 10 | 6 | 6 |
| Year 20 | 6 | 6 |
Teacher (Chicago, IL)
Age: 55 | Gender: female
Wellbeing Before Policy: 8
Duration of Impact: 0.0 years
Commonness: 14/20
Statement of Opinion:
- This policy doesn't directly affect me, but I worry about making tax compliance more challenging in the long run.
- It's important that everyone pays their fair share.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 8 |
| Year 2 | 8 | 8 |
| Year 3 | 8 | 8 |
| Year 5 | 8 | 8 |
| Year 10 | 8 | 8 |
| Year 20 | 8 | 8 |
Software Developer (Denver, CO)
Age: 42 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 0.0 years
Commonness: 11/20
Statement of Opinion:
- With reduced IRS enforcement, large corporations might exploit loopholes more easily.
- I prefer a balanced approach to funding, one that ensures effective oversight without overburdening small entities.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 7 |
| Year 3 | 7 | 7 |
| Year 5 | 7 | 7 |
| Year 10 | 7 | 7 |
| Year 20 | 7 | 7 |
Retired (Phoenix, AZ)
Age: 60 | Gender: male
Wellbeing Before Policy: 9
Duration of Impact: 0.0 years
Commonness: 8/20
Statement of Opinion:
- The policy may reduce stress for small business owners, but tax revenue is critical for public services that I rely on.
- I expect overall tax compliance to be maintained.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 9 | 9 |
| Year 2 | 9 | 9 |
| Year 3 | 9 | 9 |
| Year 5 | 9 | 9 |
| Year 10 | 9 | 9 |
| Year 20 | 9 | 9 |
Startup Founder (Seattle, WA)
Age: 27 | Gender: male
Wellbeing Before Policy: 5
Duration of Impact: 8.0 years
Commonness: 6/20
Statement of Opinion:
- The policy could reduce costs related to legal tax services for us.
- Without enforcement, compliance culture might diminish, which is risky for the economy in the long term.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 7 | 5 |
| Year 3 | 7 | 5 |
| Year 5 | 8 | 5 |
| Year 10 | 7 | 5 |
| Year 20 | 6 | 5 |
Nurse (Atlanta, GA)
Age: 48 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 0.0 years
Commonness: 10/20
Statement of Opinion:
- I understand why small businesses might support this policy, but equity in tax compliance is critical.
- The policy doesn't directly affect me, but I want to see fair contribution across income levels.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 6 | 6 |
| Year 3 | 6 | 6 |
| Year 5 | 6 | 6 |
| Year 10 | 6 | 6 |
| Year 20 | 6 | 6 |
Cost Estimates
Year 1: $1500000000 (Low: $1000000000, High: $2000000000)
Year 2: $1500000000 (Low: $1000000000, High: $2000000000)
Year 3: $1500000000 (Low: $1000000000, High: $2000000000)
Year 5: $1500000000 (Low: $1000000000, High: $2000000000)
Year 10: $1500000000 (Low: $1000000000, High: $2000000000)
Year 100: $1500000000 (Low: $1000000000, High: $2000000000)
Key Considerations
- The bill aims to reduce IRS enforcement capabilities, potentially affecting federal revenue collection effectiveness and tax compliance.
- Impact on deficit projections must consider reduced IRS ability to collect existing outstanding tax liabilities.
- The number of families and small businesses potentially benefitting from reduced audits could be offset by broader economic impacts of reduced tax compliance.