The “Inflation Reduction Act”—more properly described as “the Schumer-Manchin Tax-and-Spend Bill”—provides $80 Billion for the IRS to hire an additional 87,000 employees, making “the IRS one of the largest federal agencies” employing more people than the Pentagon, State Department, FBI and Customs and Border Protection (CBP) combined![2] This $80 Billion is approximately six (6) times the current annual budget for the IRS.
According to the Lying-Biden Administration, “These resources are absolutely not about increasing audit scrutiny on small businesses or middle-income Americans. . . audit rates will not rise relative to recent years for households making under $400,000.” But Budget Expert Rachel Greszler strongly disagrees, “it’s almost certain that households making less than $400,000 a year would face increase audits under Democrats’ bill.”[3]
As Greszler explained, “Auditing every single taxpayer with annual income over $1 million would require only 25,000 new enforcement agents.” What would the other 62,000 IRS agents do? “From fiscal years 2010 to 2021, the majority of the additional taxes IRS recommended from audits came from taxpayers with incomes below $200,000. That recommendation is based on audits of lower-income tax returns producing more bang for the buck, [i.e.] higher amounts of recommended additional tax per audit hour compared to all income groups except for the highest-income taxpayers.” Whereas the size of an average large corporation’s tax return is nearly 6,000 pages.[4]
In the early 1980s, I worked for one of the “Big 4” accounting firms as a Tax Manager. One of my clients was a large corporation which provided me a window office next door to its in-house Vice President of Tax. The office provided—which I locked when I left it—had my name on the door and was much larger than my office at the “Big 4” firm I worked for. Across from our two offices was a large conference room with no windows where the IRS auditors worked; in the summer, we set the thermostat in the conference room at 80 degrees, while our offices were a cool 68 degrees. The annual tax return for this corporation was divided up and put in boxes, which when stacked, was over six-feet high. While I was assigned to this client, we objected to every IRS recommendation of additional tax. We either presented an argument (regulation or court case), which was accepted, or we found an offsetting reduction in tax (expenses not deducted but could have been) i.e., the IRS closed the audit for three years without any change.
As indicated, large corporations can afford to fight the IRS and win! As a result, the IRS gets “more bang for the buck” or “higher amounts of recommended additional tax per audit hour” by pursuing small businesses and “taxpayers with incomes below $200,000.” In reality, no one will be safe and secure “in their persons, houses, papers, and effects” with an additional 87,000 IRS agents on the street!
In the Declaration of Independence, Thomas Jefferson provided a list of grievances against King George III to include: “He has erected a Multitude of new Offices, and sent hither Swarms of Officers to harass our People, and eat out their Substance.” That is exactly what is happening today, and more so, by providing the IRS with $80 Billion of additional funding and the hiring of 87,000 new agents “to harass our People, and eat out their Substance.”
Jefferson explained in his first inaugural address, “A wise and frugal government, which shall restrain men from injuring one another, which shall leave them otherwise free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned. This is the sum of good government, and this is necessary to close the circle of our felicities.” According to Jefferson, “to close the circle of our felicities,” or rather to pursue happiness and private property, no American would be subject to an income tax; and would not be regulated, licensed, and taxed in their economic endeavors to support themselves, their families, and acquire property. How things have changed…
We had no income tax while our Founders were alive, and the IRS did not come into existence until 86 years after the founding of the United States in 1776. On April 17, 2007, I completed my Master of Laws (LL.M.) thesis, The U.S. Individual Income Tax is Incompatible with a Free Society.[5] Although the 16th Amendment says Congress may tax incomes without apportionment, it does not state that the 16th Amendment is superior to any other amendments and all other provisions of the Constitution. Therefore, Congress and the IRS have no authority to require U.S. citizens and residents to waive their 4th and 5th Amendment rights. But this is exactly what is being done with respect to the administration and collection of U.S. income taxes. This is a fraud on the public!
It doesn’t matter what you or I believe, to avoid prison and financial ruin, we must play by the rules as promulgated by Congress and enforced by the IRS. With the recruitment of 87,000 additional IRS agents, it would behoove you to get a copy of How To, Prepare for, Control, and Successfully Survive an IRS Audit, which is available through www.JeffersonianGroup.com or directly from Amazon.com.
And hopefully, if enough people begin to understand the fraud perpetrated against them, we may be able to repeal the 16th Amendment and effectively abolish the IRS, replacing the intrusive and unconstitutional income tax with a national sales or consumption tax.[6]
Dum Spiro, Spero—While I breathe, I hope.
Slainte mhath,
Robert G. (Mike) Beard Jr., C.P.A., C.G.M.A., J.D., LL.M.
[1] Each Jeffersonian Group, LLC (www.jeffersoniangroup.com) publication is intended solely for information purposes and is not intended nor does it purport to provide legal, tax, individual investment advice, estate planning advice, medical advice, insurance, or business advice. In addition, information and analysis is compiled from sources believed to be reliable but such accuracy cannot be guaranteed. Readers should do their own research and consult with expert medical, legal, tax, insurance, business, and financial counsel before taking any action. Copyright © 2022 Jeffersonian Group, LLC
[2] Craig Bannister, Biden’s 87,000 New IRS Employees Exceed the Total Population of His Home Town, Entire British Army And…, August 11, 2022, cnsnews.com; and Senator Ted Cruz, Senate Democrats Block Cruz Amendment, Insist 87,000 More IRS Agents Are Needed To Audit Middle Class Americans, 08/08/2022, https://www.cruz.senate.gov.
[3] Rachel Greszler, Fact-Checking Team Biden on Who Those 87,000 New IRS Agents Would Audit, August 12, 2022, Heritage Foundation – Grover M. Hermann Center for the Federal Budget.
[4] Id.
[5] My LL.M. Thesis, The U.S. Individual Income Tax is Incompatible with a Free Society, is available through www.JeffersonianGroup.com or directly from Amazon.com. By the way, I graduated with Honors, summa cum laude from an ABA accredited Law School, i.e., my thesis was NOT challenged.
[6] Id.