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Op-Ed: Biden’s IRS Auditor Army will
disrupt economic recovery
By Julio Gonzalez | RealClearWire
“Obviously, this will be a huge burden on many small business owners,
who will be forced to endure lengthy audits and do not have the
resources to hire expert lawyers or accountants,” |
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 The Biden administration’s decision to recruit
nearly 90,000 new IRS auditors could have a chilling effect on small businesses
and economic growth, permanently impeding our nation’s ability to recover from
its current economic malaise.
As part of the misleadingly titled “Inflation Reduction Act,” President Joe
Biden and his allies secured roughly $80 billion in new IRS funding to hire
87,000 auditors. This is bad news for the American economy.
One of the many ways that small businesses can succeed and help grow the economy
is by taking advantage of tax credits and deductions that leave more money in
the hands of owners to reinvest in their businesses and offer more competitive
pay for their employees.
But with the looming threat of a veritable army of auditors being mobilized by
the Biden administration, it is highly likely that many small businesses will
decline to seek the benefits of those credits and deductions, lest they face the
costly headache of aggressive audits from the IRS. In fact, my firm, Engineered
Tax Services, specializes in working with businesses to understand and utilize
those credits and deductions, and some of my firm’s small business clients have
told me this is the case.
Business and financial experts are equally certain that Biden’s Auditor Army
will target small businesses.
“There is no doubt that boosting IRS audit capabilities through a vast increase
in the hiring of 87,000 new staff focused on this effort will hit small
businesses the hardest,” said Karen Kerrigan, president and CEO of the Small
Business and Entrepreneurship Council, in an interview with The Center Square.
“The tax data shows that it is small businesses of moderate means, not ‘the
wealthy,’ that are targeted most frequently.”
Basic math proves this will undoubtedly be the case with Biden's new Auditor
Army. Biden wants to unleash 87,000 additional IRS agents on the American
people, but there are fewer than 800 billionaires and roughly 34,000
millionaires in the country. Even if each of them gets assigned a full-time,
year-round personal auditor, that leaves 52,200 agents free to harass small
business owners and everyday Americans.
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Undergoing an audit is an incredibly serious and costly endeavor, regardless of
the reason for the audit or the outcome, and this cost is a burden both on the
business and the community in which it operates, a clear impediment to economic
growth and prosperity. Even when auditors find no wrongdoing, the experience can
be financially devastating for small business owners.
“Obviously, this will be a huge burden on many small business owners, who will
be forced to endure lengthy audits and do not have the resources to hire expert
lawyers or accountants,” Kerrigan explained.
“Some will be forced to bring in this expensive support, which means fewer
resources to invest in their business, their workers and their communities….
Dealing with crushing inflation and the economic downturn is unbearable enough
for small business owners, without having this type of threat hanging over their
heads,” he continued.
The insult to the injury Biden’s Auditor Army will inflict on the American
economy is that it comes at a time when many small businesses are already facing
severe economic hardship, if not outright ruin.
A July survey by the small business network Alignable found that “45% of small
businesses (SMBs) are halting their hiring, largely because they say they can’t
afford to add staff.”
A different survey conducted by the same network, also in July, revealed that
“47% of small business owners … say their businesses are at risk of closing by
fall 2022, unless economic conditions improve significantly.”
That number is “up 12 percentage points from last summer, when only 35% were
concerned about economic issues forcing them to shut down,” according to
Alignable, and “SMBs in key industries face even bigger problems: 59% of
retailers are at risk, along with 52% in construction, 51% in the automotive
sector, and 50% of restaurant owners.”
Our small businesses are in crisis, and the last thing they need is an army of
militarized bureaucrats going door to door carrying out audits, further
crippling those businesses and the economic growth they generate.
Julio Gonzalez is the CEO and Founder of Engineered Tax Services,
Inc.
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