Biden to beef up audits of high-earners

WASHINGTON — President Joe Biden, in an effort to pay for his ambitious economic agenda, is expected to propose giving the Internal Revenue Service an extra $80 billion and more authority over the next 10 years to help crack down on tax evasion by high-earners and large corporations, according to two people familiar with the plan.

The additional money and enforcement power will accompany new disclosure requirements for people who own businesses that are not organized as corporations and for other wealthy people who could be hiding income from the government.

The Biden administration will portray those efforts — coupled with new taxes it is proposing on corporations and the rich — as a way to level the tax playing field between typical American workers and high-earners who employ sophisticated efforts to minimize or avoid taxation. The $80 billion in proposed funding would be an increase of two-thirds over the agency’s entire funding levels for the past decade.

The administration estimates that giving the IRS an additional $80 billion over a decade could raise at least $780 billion in new tax revenue, for a net gain of at least $700 billion.

Biden plans to use money raised by the effort to help pay for the cost of his “American Families Plan,” which he will detail before addressing a joint session of Congress on Wednesday. It will be the largest single revenue raiser for the plan.

That plan, which follows his $2.3 trillion infrastructure package, is expected to cost at least $1.5 trillion and will include universal prekindergarten, a federal paid leave program, efforts to make child care more affordable, free community college for all and tax credits meant to fight poverty.

The administration is expected to portray the $780 billion it expects to collect through enhanced enforcement as conservative. That figure includes only money directly raised by enhanced tax audits and additional reporting requirements, and not any additional revenue from people or companies choosing to pay more taxes after previously avoiding them.

Many economists and tax experts welcomed the proposal, which they said would help reverse years of declining enforcement actions against companies and the rich at the agency.