Staff Reports
President Biden appears to be nudging the IRS into a new era of tax auditing that might be more aptly described as a “marriage penalty.” While he pitched Congress on a hefty budget to fund audits primarily aimed at those with incomes over $400,000, new reports reveal that the fine print could throw married couples under the bus.
With the government poised to toss billions at the IRS for increased scrutiny, the administration promised to crack down on high earners. However, in a hilarious twist of bureaucratic logic, a couple making $220,000 each will find themselves more likely to be audited than a single person making $390,000. It’s as if the government is rewarding singleton status while punishing those who decide to tie the knot. Makes one wonder if they’ll start handing out tax incentives for Tinder users next.
The Treasury Inspector General’s findings suggest that while IRS officials are spinning their wheels trying to make sense of a convoluted auditing system, it’s clear that the marriage threshold isn’t double for couples. Simply put, that means two incomes beneath the cutoff could still lead to increased chances of an audit. In other words, the IRS is channeling its inner relationship counselor, creating a financial crisis right out of a bad rom-com. Couples might be better off hiding their income behind a joint “single” account rather than facing the wrath of auditor number crunchers.
Biden's supercharged IRS eyes new 'marriage penalty' in tax audits https://t.co/WYe3encksK
— The Washington Times (@WashTimes) September 3, 2024
Adding to the confusion is the IRS’s struggle to define its parameters amidst the chaos of contradictory guidance. With the new methodology being designed, the IRS is set to use pre-pandemic audit rates from 2018 as a benchmark. That sounds like a solid plan—if the goal is to ignore the realities of budget cuts, pandemic hurdles, and overall bureaucratic inefficiency. Meanwhile, taxpayers just want clarity, not a pothole of confusion thrown at them from the very agency tasked with collecting their money.
One has to wonder how much of this muddled approach is intentional. Grover Norquist, a watchdog of tax policy, argues that the administration’s ambiguity serves a deeper agenda. By keeping guidelines loose, the Biden administration can play fast and loose with audits, targeting small business owners while maintaining plausible deniability when it comes to public backlash. If the tax code were a game of Monopoly, they might just pivot the rules mid-game and see who flips the board first.
And lest anyone forget, the Inflation Reduction Act has added fuel to the IRS fire, equipping the agency with $80 billion over the next decade for modernization and enforcement. With Republicans pushing back on this tidal wave of funds, there’s a story lurking beneath the surface that could come back to haunt taxpayers who just wanted a simple return. As audits potentially ramp up, taxpayers across income levels may find themselves in a game they didn’t sign up for—a marriage penalty that rewrites the rules of financial intimacy.
