GOP’s First Bill Would ‘Repeal 87,000 IRS Agents,’ McCarthy Says

By: Doug Sword and Jonathan Curry

If Republicans take control of the House in 2023, they will support the addition of 200,000 police officers nationwide, a 50 percent cut in permitting times for energy development, and full funding of border enforcement.

But first, they’ll go after the IRS.

“We’ll put it out to the entire country: This is what we’ll do,” House Minority Leader Kevin McCarthy, R-Calif., said at a September 23 event on his caucus’s newly unveiled “Commitment to America” platform.

“But on that very first day that we’re sworn in, you’ll see that it all changes — because on our very first bill we’re going to repeal 87,000 IRS agents,” McCarthy said.

Throughout the nearly one-hour event, House GOP leaders decried the addition of 87,000 agents, who they say would pursue average Americans rather than the billionaires Democrats talk about as being the targets of beefed-up IRS enforcement.

Enacted in August, the Inflation Reduction Act (P.L. 117-169) provided the IRS with nearly $80 billion to spend over 10 years on top of its annual appropriations. While the IRS wants to hire roughly 87,000 new employees with the additional funding, that won’t happen all at once, and it won’t just be revenue agents. A May 2021 Treasury report detailing the Biden administration’s proposed agenda for increasing tax compliance anticipates that the IRS would incrementally hire 86,852 employees over the coming decade.

According to Treasury, a large portion of those new employees would also be replacing outgoing employees. The IRS’s workforce stands at about 80,000, but nearly two-thirds of those employees will be eligible to retire within the next six years.

Treasury Secretary Janet Yellen recently indicated that some of the added funding would be immediately directed toward getting the agency caught up on its backlog and bolstering its weak taxpayer service levels while it figures out how to spend the rest of the money.

Billionaires or Small Business Owners?

The “87,000 IRS agents” reference was perhaps the biggest can’t-miss applause line during the House GOP event, held near Pittsburgh.

House Minority Whip Steve Scalise, R-La., complained of record spending by a Democrat-controlled Congress: “When you see every bill that comes out of Congress, not hundreds of billions but trillions of dollars of borrowed money — new taxes, 87,000 IRS agents.” Federal spending in 2021 was a record $6.8 trillion, while 2022 spending is expected to be the third highest, behind 2020’s $6.6 trillion.

“You know, all of my years in Congress, I have never had a single phone call from anybody saying, ‘Steve, please add more people to the IRS,’” Scalise said. “If there’s 87,000 people needed in America, it’s at the border to secure America’s border, not over at the IRS to go after small businesses and hardworking families.”

Democrats have argued that the $80 billion injection will bring in $400 billion over 10 years, according to a Treasury estimate. They also say most of that will come from wealthy taxpayers, citing IRS studies of the tax gap that show the single biggest chunk of unpaid taxes is from business income not reported on individual income tax returns.

Rep. Patrick T. McHenry, R-N.C., headed the McCarthy-appointed task force that made economic and workforce-related recommendations in the GOP plan, including an extension of expiring Tax Cuts and Jobs Act provisions.

“Do they really need 87,000 people to go after billionaires?” McHenry asked. “No. They’re coming after your PayPal account; they have changed regulations so they can look at your bank accounts of $600 or more transactions,” he said, referring to an American Rescue Plan Act of 2021 provision requiring “third-party settlement organizations” like Uber, Etsy, and PayPal — but not banks — to file Forms 1099-K beginning in 2023.

“So those 87,000 IRS agents are not about someone else; they’re about every one of us that are taxpayers,” McHenry said. “We’re going to stop that, we’re going to check that, and we’re going to put you back in charge of your own accounts.”