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How much did Congress lose by defunding the IRS? Way more than we thought.
(www.washingtonpost.com)
this post was submitted on 14 Jun 2023
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The IRS generates many times more revenue than its operating cost when they audit wealthy taxpayers.
Meanwhile, they are now requiring people to disclose even $600/yr income gained from side sources. This is down from the previous requirement of mandating it only if one earn $20,000/yr from side sources.
If they only intend to audit the big guys, why are they suddenly requiring people to report a measly $600/yr in side-income while simultaneously massively beefing up the number of auditors?
Independent contractors have loosely had the same $600 threshold for a long time (you're supposed to report all income, but the payer is required to send the contractor a 1099 when the income is $600 or more). As far as I can tell, the new $600 rule is kind of just connecting the dots and making it harder to ignore the tax responsibility when the money is transferred through apps like Venmo. I agree it's not a great thing to focus on when the wealthy are not paying their fair share of taxes, but it's also not a huge change.