I will never--*never*--stop fighting on this hill!
The incomparable Natasha Sarin continues to bang the drum that cuts to the IRS are shadow tax cuts for wealthy tax evaders.
I’m here today to briefly amplify one of the most muscular and consequential anti-DOGE cases out there: Natasha Sarin’s oped in the WaPo on Musk’s plan…
…to shrink the Internal Revenue Service’s staff by up to 50 percent — [which] would, very conservatively, lead to a $400 billion increase in uncollected taxes over the next decade. It could easily mean more than $2 trillion in losses.
Every year, there exists something called the “tax gap:” the difference between what’s owed in taxes and what’s paid. At $700 billion per year, it’s big, even by DC standards. A key thing to know about this gap is that it is not spread equally among taxpayers. If you’re a regular, old W-2-reporting-lunch-box-toting wage earner, the IRS has clear records of what you owe, which you generally pony-up (in no small part because the IRS already has it from your withholdings).
But, Sarin points out, with fewer IRS auditors to scrutinize more complex income structures, i.e., those whose incomes derive more from assets than paychecks—the ones toting Bento Boxes v. lunch boxes—“those who earn income in opaque ways would have carte blanche to cheat, with a paucity of tax police on the beat.”
This is why, in one of the most straight-forward, intuitive, and compelling examples of cost/benefit analysis you’ll ever see, a dollar of tax enforcement targeting the top 10% yields $12.
To be unequivocally clear, the hundreds of billions of much-needed new revenue from this play does not invoke any changes in the tax code, no rate raisers, no base-broadeners. These new revenues derive solely from enforcing the existing tax code.
To oppose increased IRS funding, to prevent them from updating their systems, many of which are antiquated, as Congressional Republicans have long done, or to cut further, as the DOGE is doing, is to support tax evasion and thereby, criminality. It is providing back door, illegal tax cuts, to wealthy tax evaders. It significantly worsens our increasingly shaky fiscal outlook and it shifts the burden of taxation to those with fewer resources.
In this regard, it is yet one more example of President Trump sticking it to working-class voters who sent him back to White House believing that he would help them. To do so under the guise of “government efficiency” is one of the most cynical plays I’ve seen so far, and these days, that’s a high bar to clear.
Assuming the US survives more or less intact and is able to find some common sense, illegally avoided taxes can be collected for quite a long time. The IRS says:
"The IRS generally has 10 years – from the date your tax was assessed – to collect the tax and any associated penalties and interest from you. This time period is called the Collection Statute Expiration Date (CSED).
Your account can include multiple tax assessments, each with their own CSED. Examples may include:
Original tax amounts you owe when you file your federal tax return
Additional taxes you owe when you amend your return
Substitute for return tax balances
Additional tax we find that you owe due to an audit
Civil penalty amounts
Certain penalties and interest"
Note the "each with their own CSED" part. So an audit in year 9 has another 10 years to be collected.
I remember reading some time ago that one of the biggest differences between USA and Italy is that US citizens largely pay the taxes they owe voluntarily. Whereas Italy has a compliance problem, as well as an underground economy that starves the government for revenue. There are other downsides as well... who wants their economy to look more like Italy's? It seems we are headed that direction, and of course wealthy scofflaws love that shizzle. The rules never did apply to them, did they?