# Plain Language Summary: IRS Enhancement and Tax Gap Reduction Act of 2021

This bill is about giving the IRS more money and staff to catch people and businesses that aren't paying the taxes they owe. Right now, there's a massive gap between what people and companies are supposed to pay in taxes and what they actually pay—the bill says this gap averages around $381 billion every year. The IRS has been getting smaller and weaker over the past decade, with fewer auditors and older technology, so it's become easier for high earners and large corporations to get away with underpaying their taxes.

The bill proposes spending about $11.8 billion over ten years to beef up the IRS. Specifically, it would give the agency $5 billion to hire more auditors and enforcement staff, $3.8 billion to upgrade technology systems, and $2.5 billion to improve customer service. The money would be used to significantly increase audit rates for wealthy individuals and large corporations. For example, the bill sets targets like auditing 50% of people making over $100 million annually (compared to just a few percent today) and 90% of the largest corporations. The bill also emphasizes that most of the unpaid taxes come from the wealthiest Americans—estimates suggest at least 70% of the tax gap comes from the top 1%.

The practical impact is that if you're a high-income individual or a large corporation, you'd face a much higher chance of being audited. For most regular workers and small business owners, this shouldn't directly affect you much, though supporters argue it would be fair since wealthy people and big companies are currently underpaying while average households essentially subsidize them. The bill's supporters claim that for every dollar spent on IRS enforcement, the government gets back about four dollars in collected taxes, making it a financially smart investment. However, critics might worry about increased scrutiny on businesses or argue about the size of the investment.

IRS Enhancement and Tax Gap Reduction Act of 2021

DeFazio, Peter A.

IRS Enhancement and Tax Gap Reduction Act of 2021 This bill appropriates additional amounts to the Internal Revenue Service (IRS) in FY2022-FY2031 for tax enforcement, improving IRS technology infrastructure, and taxpayer services.