Warren Tells IRS to Focus Audits on the Rich Not Low-Income Taxpayers

Senator Elizabeth Warren is back on her favorite topic – making rich people pay their fair share. And honestly shes not wrong about this one.

Warren sent a letter to the IRS basically demanding to know why the agency keeps going after low income taxpayers who claim the Earned Income Tax Credit while letting wealthy tax dodgers slide. The numbers are pretty damning.

IRS audit rates have plummeted across the board over the last decade thanks to budget cuts. But the decline hasnt been equal. Audits of millionaires dropped by 80% while audits of EITC recipients – were talking people making under $20,000 a year – stayed relatively stable.

Why? Because auditing poor people is easy. The IRS can do it by mail with form letters. Auditing wealthy people with complicated tax situations requires actual human investigators and those cost money the agency doesnt have anymore.

So we end up in this backwards situation where a single mom working two jobs is more likely to get audited than a hedge fund manager hiding money in offshore accounts. Feels great right?

Warren wants the IRS to shift resources toward high income non-filers and complex corporate structures. You know the stuff that actually costs the government real money. The agency has admitted theyre basically outgunned when it comes to enforcing tax law on wealthy individuals and corporations.

The tax gap – the difference between what people owe and what they actually pay – is estimated at over $600 billion annually. Most of that comes from the top. But the IRS keeps hassling people who can barely afford to fight back.

This isnt even a controversial position. Theres bipartisan agreement that the IRS needs more funding to go after wealthy tax cheats. The disagreement is over whether to actually provide that funding.

Until then expect more audits of working families and fewer of billionaires. Because thats apparently how America works now.