Yellen tells the IRS to produce an $80 billion spending plan within six months

By David Lawder

WASHINGTON (Reuters) – U.S. Treasury Secretary Janet Yellen has directed the head of the Internal Revenue Service to draw up a detailed plan to deploy $80 billion in newly enacted enforcement funds within six months, the newspaper showed. Wednesday an internal Treasury memorandum.

Yellen wrote in the memo to IRS Commissioner Charles Rettig, reviewed by Reuters, that the operating plan “must include details on how resources will be spent over the ten-year horizon on technology, service improvement and staffing.”

“This operating plan is key to ensuring that the public and Congress can hold the agency accountable as it pursues necessary improvements,” he wrote, adding that it must include metrics for focus areas and goals the agency must achieve in the next few years. years.

The $80 billion in new resources is a key revenue-raising provision in President Joe Biden’s $430 billion tax, climate and prescription drug act signed into law Tuesday. The Congressional Budget Office has estimated that the new resources would result in the collection of an additional $204 billion in tax revenue over 10 years through better tax compliance.

An earlier version of the bill would have required by law a detailed spending plan from the IRS within six months, but that provision was later struck down. Yellen’s memo administratively restored the deadline.

Yellen told Rettig that she was prepared to approve the short-term use of the funds for improvements next year’s filing season, but that the IRS plan was a “prerequisite” for any broader use of the funds. funds from the agency.

Yellen also repeated her directive last week that she doesn’t want IRS investments to result in a higher chance of audits for households earning less than $400,000 or for small businesses, compared to “historic levels.”

But it’s unclear what historical audit rates Yellen is targeting. The Tax Policy Center, a Washington think tank run by the Brookings Institution and the Urban Institute, says a decade of budget cuts slashed overall audit fees in 2019 to 0.4% of 1 .1% in 2010 and the COVID-19 pandemic cut those rates even more.

(Reporting by David Lawder; editing by Richard Pullin)

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