March 16, 2023

Warren, King, 19 Senators to IRS and Treasury: Use New IRS Funding to Protect Taxpayer Rights and Increase Tax Enforcement on High-Income Individuals and Large Corporations

Text of Letter (PDF)

Washington, D.C. – U.S. Senators Elizabeth Warren (D-Mass.) and Angus King (I-Maine) led a letter with 19 other senators to Internal Revenue Service (IRS) Commissioner Daniel Werfel and Treasury Secretary Janet Yellen, expressing strong support for Secretary Yellen’s directive for the IRS not raise audit rates for small businesses or households making under $400,000 annually and that new enforcement funds provided in the Inflation Reduction Act will focus on reducing tax avoidance by large corporations and the mega-rich. 

Senators Ed Markey (D-Mass.), Chris Coons (D-Del.), Bernie Sanders (I-Vt.), Alex Padilla (D-Calif.), Ron Wyden (D-Ore.), Martin Heinrich (D-N.M.), John Hickenlooper (D-Colo.), Tammy Duckworth (D-Ill.), Sheldon Whitehouse (D-R.I.), Sherrod Brown (D-Ohio), Tom Carper (D-Del.), Bob Menendez (D-N.J.), Cory Booker (D-N.J.), Ben Cardin (D-Md.), Jack Reed (D-R.I.), Richard Blumenthal (D-Conn.), Michael Bennet (D-Colo.), Tammy Baldwin (D-Wis.), and Patty Murray (D-Wash.) signed the letter. 

“We… understand that the Administration is still working on the operational plan regarding implementation of the new funding and Secretary Yellen’s directive. We ask that this plan, when finalized, continue to reflect and elaborate on your stated focus on protecting taxpayer rights and increasing enforcement for high-income individuals and large corporations,” wrote the senators. 

In response to increased funding for the IRS in the Inflation Reduction Act, Secretary Yellen directed former IRS commissioner Rettig, “that any additional resources—including any new personnel or auditors that are hired—shall not be used to increase the share of small business or households below the $400,000 threshold that are audited relative to historical levels. This means that, contrary to the misinformation from opponents of this legislation, small businesses or households earning $400,000 per year or less will not see an increase in the chances that they are audited. Instead, enforcement resources will focus on high-end noncompliance.” 

The senators expressed support for this clarity and asked the IRS to elaborate on its focus on protecting taxpayer rights and increasing enforcement for high-income individuals and large corporations. They urged the IRS to use the new funding to support tax fairness and close the tax gap caused by tax avoidance from the ultra-wealthy and large corporations, protect the rights of lower-income taxpayers, and swiftly improve taxpayer customer service and information technology. 

Senator Warren has led the fight for a fairer tax system – making it easier and cheaper for normal taxpayers to file their taxes and making sure the ultra-wealthy and corporations pay their fair share: 

  • In July 2022, Senator Warren led 22 of her colleagues in introducing the Tax Filing Simplification Act of 2022 to simplify the tax filing process for millions of Americans by lowering costs, eliminating red tape for all taxpayers, and saving them hours and hundreds of dollars. 
  • During an exchange of the United States Senate Finance Committee in June 2022, U.S. Treasury Secretary Janet Yellen agreed with Senator Warren on the need to create a free tax filing system that actually works for Americans. 
  • In April 2022, Senator Warren and Representatives Sherman and Porter sent a letter to Intuit regarding the company’s unethical use of the revolving door to hire former regulators to defend their shady business practices that scam taxpayers out of billions of dollars. 
  • In April 2022, Senator Warren and Representative Judy Chu (D-Calif.) sent a letter to Secretary Yellen and IRS Commissioner Charles Rettig expressing concerns about higher IRS tax audit rates for low-income Americans. The lawmakers called on the IRS to cease this unfair practice and asked for information regarding their audit rates on low-income Americans and their plans to make the audit data accessible to the public. 
  • In February 2022, Senator Warren and Representative Pramilla Jayapal (D-Wash.) sent a letter to the Acting Inspector General of the Department of Treasury and the Treasury Inspector General for Tax Administration, calling on them to open an investigation into the unethical revolving door between the world’s largest accounting firms and the Treasury Department and IRS. 
  • In May 2021, Senator Elizabeth Warren introduced the Restoring the IRS Act of 2021, which would provide the IRS with the resources it needs to go after wealthy tax cheats and close the tax gap.