Bill Overview
Title: A bill to prevent the use of additional Internal Revenue Service funds from being used for audits of taxpayers with taxable incomes below $400,000 in order to protect low- and middle-income earning American taxpayers from an onslaught of audits from an army of new Internal Revenue Service auditors funded by an unprecedented, nearly $80,000,000,000, infusion of new funds.
Description: This bill prohibits the use of additional funds appropriated to the Internal Revenue Service under the Inflation Reduction Act of 2022 for audits of taxpayers with taxable incomes below $400,000.
Sponsors: Sen. Crapo, Mike [R-ID]
Target Audience
Population: Taxpayers worldwide with incomes below $400,000
Estimated Size: 150000000
- The bill targets taxpayers with taxable incomes below $400,000, as it aims to prevent additional IRS audits on this income group.
- The bill intends to safeguard low- and middle-income individuals from increased IRS scrutiny due to new funding for the IRS.
- By restricting the use of $80 billion in new funds from the Inflation Reduction Act, it aims to limit the IRS's capacity to conduct more audits on lower-income brackets.
Reasoning
- The policy is intended to protect taxpayers with incomes below $400,000 from increased IRS audits, making them feel less targeted by audits. This could increase their sense of financial security and overall wellbeing.
- Given the large number of taxpayers under this income level, it's expected that a broad range of individuals from various socioeconomic backgrounds will be included in the target population.
- The policy budget and scope indicate that not all potential affected taxpayers can perceive substantial impacts, particularly in the short term, partly due to the natural variability in audit frequency and randomness.
- This policy specifically affects perceived audit risk; hence individuals who were previously concerned about audits are most likely to experience changes in wellbeing.
- Cost limitations mean the policy's most immediate effects are likely psychological, with actual audit practices being unaffected for many individuals due to resource constraints.
Simulated Interviews
Freelance Graphic Designer (Phoenix, AZ)
Age: 28 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 2.0 years
Commonness: 15/20
Statement of Opinion:
- It's reassuring to know I won't face unexpected audits.
- This policy gives me peace of mind to focus more on my work.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 6 |
| Year 3 | 8 | 6 |
| Year 5 | 7 | 6 |
| Year 10 | 7 | 6 |
| Year 20 | 7 | 6 |
IT Specialist (Dallas, TX)
Age: 45 | Gender: male
Wellbeing Before Policy: 8
Duration of Impact: 1.0 years
Commonness: 10/20
Statement of Opinion:
- I wasn't overly worried about audits, but it's good to know I'll likely not face one unnecessarily.
- This policy might encourage me to take some tax strategies without worry.
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 |
Retired Teacher (Des Moines, IA)
Age: 62 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 5.0 years
Commonness: 18/20
Statement of Opinion:
- I feel a bit more secure knowing my limited income is less likely to be scrutinized.
- I hope this doesn't mean richer people get away with tax dodging.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 7 | 5 |
| Year 5 | 7 | 5 |
| Year 10 | 6 | 5 |
| Year 20 | 6 | 5 |
Small Business Owner (Brooklyn, NY)
Age: 50 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 10.0 years
Commonness: 12/20
Statement of Opinion:
- With my fluctuating income, audit fears are real; this eases my anxiety.
- This will let me focus more on growing my business rather than tax worries.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 8 | 6 |
| Year 3 | 8 | 6 |
| Year 5 | 8 | 5 |
| Year 10 | 8 | 5 |
| Year 20 | 7 | 5 |
Nurse (Nashville, TN)
Age: 34 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 3.0 years
Commonness: 14/20
Statement of Opinion:
- While audits weren't top on my worries, it's a relief not to deal with possible audits.
- The policy might save me some headache during tax season.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 7 | 6 |
| Year 10 | 7 | 6 |
| Year 20 | 7 | 6 |
Corporate Lawyer (Miami, FL)
Age: 40 | Gender: male
Wellbeing Before Policy: 9
Duration of Impact: 0.0 years
Commonness: 5/20
Statement of Opinion:
- This policy is unlikely to impact us significantly; audits weren't a pressing concern.
- Tax advice services might see less stress from clients in our income range.
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 |
Waiter/Bartender (Portland, OR)
Age: 27 | Gender: other
Wellbeing Before Policy: 5
Duration of Impact: 5.0 years
Commonness: 16/20
Statement of Opinion:
- Barely enough to make ends meet, this gives cushion against unexpected problems.
- It's a welcome relief from worrying about making a tax error.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 6 | 5 |
| Year 3 | 6 | 5 |
| Year 5 | 6 | 5 |
| Year 10 | 6 | 5 |
| Year 20 | 6 | 5 |
Public School Teacher (Chicago, IL)
Age: 39 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 4.0 years
Commonness: 17/20
Statement of Opinion:
- Without this, I might be more stressed dealing with tax returns.
- This policy might encourage me to look for ways to minimize taxes without fear.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 7 | 5 |
| Year 10 | 6 | 5 |
| Year 20 | 6 | 5 |
Software Developer (San Francisco, CA)
Age: 31 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 2.0 years
Commonness: 13/20
Statement of Opinion:
- I wasn't too concerned about audits, but it's one less thing off the list.
- It won't affect my daily life much, but it's good policy.
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 | 6 |
| Year 10 | 7 | 6 |
| Year 20 | 7 | 6 |
Real Estate Agent (Atlanta, GA)
Age: 55 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 7.0 years
Commonness: 8/20
Statement of Opinion:
- Given the fluctuations in my income, I feel less pressured about audits.
- The policy is a good step for economic stability in uncertain times.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 7 | 5 |
| Year 10 | 6 | 5 |
| Year 20 | 6 | 5 |
Cost Estimates
Year 1: $20000000 (Low: $15000000, High: $25000000)
Year 2: $21000000 (Low: $16000000, High: $26000000)
Year 3: $22000000 (Low: $17000000, High: $27000000)
Year 5: $23000000 (Low: $17000000, High: $29000000)
Year 10: $40000000 (Low: $30000000, High: $50000000)
Year 100: $50000000 (Low: $40000000, High: $60000000)
Key Considerations
- This bill does not increase administrative costs significantly but affects IRS operational focus.
- Potential reduced pressure on lower-income taxpayers which could enhance consumer confidence and spending.
- Indirectly shifts IRS auditing focus to higher-income brackets.
- Constraints on IRS enforcement could slightly increase the tax gap with less recovered underpayments.