Fact-Checking the Misleading Claim About 87,000 Tax Agents

As the midterm campaigns come to a close, Republican lawmakers are seizing on misleading claims warning that Democrats are recruiting an army of tax auditors, finding new resonance in an assertion debunked months ago.

The assertion began to circulate when President Biden first outlined a wide-ranging social spending plan last fall. A whittled-down version of that plan, known as the Inflation Reduction Act, was enacted this summer, fueling a new wave of attacks that have gained momentum as the elections neared.

That law provides the Internal Revenue Service with nearly $80 billion in funding, including $45.6 billion for enforcement activities. But the suggestion that this would amount to 87,000 additional tax collectors scrutinizing the financial filings of middle-class Americans is wrong.

Here’s a fact check.

What Was Said

“When House Republicans earn the majority, we will STOP Biden’s army of 87,000 IRS agents hired to audit hardworking American families and small businesses.”
— Representative Elise Stefanik, Republican of New York, in a tweet in November.

“Senate Democrats could have secured the border to protect you and your family. They didn’t. Instead, they hired 87,000 IRS agents to audit you.”
— Senate Republicans’ official Twitter account in November.

“$80 Billion: Increased IRS Funding. 87,000: Full-Time IRS Agents Added Using $80 Billion in Funding. 710,000 New Audits on Taxpayers Making $75,000 or Less.”
— a graphic Tiffany Smiley, the Republican candidate for Senate in Washington, shared on Twitter in October.

These claims are misleading. The 87,000 figure refers to a May 2021 estimate from the Treasury Department of the total number of employees — not just auditors — the I.R.S. proposes to hire over the next 10 years with funding requested by Mr. Biden. And while the I.R.S. plans to conduct more audits, wealthy Americans and businesses will bear the brunt of that scrutiny, not, as Republicans have suggested, working families.

Among the I.R.S.’s work force of about 79,000 employees, 10,000 are actually agents. (Of those, 8,000 are revenue agents who audit tax filings and 2,000 are special agents who investigate potential tax crimes.) In fact, the two most common I.R.S. jobs have little to do with tax auditing or investigations: about 13,000 are customer service representatives who answer taxpayer phone calls and 10,000 are seasonal employees who file mail or transcribe data. Other jobs include lawyers, examiners, technicians and appeals officers.

The additional funding for to the I.R.S. will allow the agency to modernize its infrastructure and replace an aging work force, and it is unclear just how many full-time employees or agents will be hired in the next decade, Treasury Department officials said. The majority of those new employees will replace the 52,000 expected to retire in the near future, the officials said, and many will focus on customer service and updating the agency’s technology infrastructure — not investigating the finances of ordinary Americans.

In other words, the funding will enable the I.R.S. to increase its work force over the next 10 years to 113,000 employees. That is about the same number of workers it employed annually in the early 1990s.

In a September speech, Janet Yellen, the Treasury secretary, outlined some of that hiring — an additional 5,000 customer service representatives and fully staffing the agency’s taxpayer assistance centers — and committed to not raise audit rates for households making under $400,000 a year.

Using historical audit rates, House Republicans estimated this summer that the additional funding will correspond to 710,000 new audits for taxpayers making $75,000 or less — as Ms. Smiley, the Republican candidate for Senate in Washington State, tweeted. But those calculations ignore the proportional effect on each income bracket.

In the past decade, tax audit rates have fallen most starkly for higher income earners, which the I.R.S. attributes to diminished resources and therefore its inability to retain specialized auditors needed to examine the filings of the wealthy.

Increasing funding for the I.R.S., the nonpartisan Congressional Budget Office said in September 2021, would address those needs and result in increased audit rates for everyone, particularly for high-income earners.

The I.R.S. examined 1.4 million individual income tax returns in 2010, about 1 percent of the total number filed. In 2018, the latest year with available data when Republicans started making these claims, audits decreased to 370,000, or about 0.2 percent.

The budget office estimated increasing I.R.S. funding would return enforcement to its 2010 levels. Doing so would result in about 1.2 million more audits; of those, 583,000 would target people making less than $75,000.

But that is because a vast majority of tax filers — about 70 percent — make under that threshold. Looking at what fraction of returns are examined by income group, rather than the sheer number, shows that wealthier taxpayers would have a better chance of being audited than lower-income earners under the law.

Under 2010 levels of enforcement, about 0.5 percent of returns reporting between $1 and $75,000 in income would be audited, as would 1 percent of those with more than $75,000 in income. In comparison, those rates were 0.3 percent and 0.1 percent in 2018. For those making more than $10 million, more than 20 percent of returns would be examined under 2010 levels, compared with 5.3 percent in 2018.

It is also worth noting that of those 710,000 additional audits cited by Republicans, about 127,000 would target those with “no positive income,” such as those who report negative business income or capital losses. Including these filers with lower-income taxpayers is also misleading, as they actually receive more audit scrutiny than any other income group outside of those making over $5 million annually.

In a statement in support of the law released this summer, three former I.R.S. commissioners appointed by Republican and Democratic presidents disputed claims about increased scrutiny. The law would add “the capacity to enforce the tax laws against sophisticated taxpayers who today evade their tax obligations freely,” they said, “because they know that the I.R.S. lacks the tools it needs to pursue them.”