Wyden, King Introduce Bill to Reverse Republican IRS Cuts, Restore Efforts to Go After Wealthy Tax Cheats

Wyden, King Introduce Bill to Reverse Republican IRS Cuts, Restore Efforts to Go After Wealthy Tax Cheats

The Stop Cheaters Act would raise $13 in revenue for every taxpayer dollar invested

Washington, D.C. - Senate Finance Committee Ranking Member Ron Wyden, D-Ore., joined U.S. Senators Angus King, I-Maine, Elizabeth Warren, D-Mass, Tim Kaine, D-Va., and Sheldon Whitehouse, D-R.I., in introducing legislation to provide additional funding for the Internal Revenue Service (IRS) to strengthen and expand tax collection services and systems and crack down on tax cheating by the wealthy.

"Wealthy tax cheats and scofflaw corporations are stealing billions and billions from the American people by refusing to pay what they legally owe, and far too many of them are getting a free pass because Republicans gutted the enforcement capacity of the IRS. A rich tax cheat who shelters mountains of cash among a web of shell companies and passthroughs is likelier to be struck by lightning than face an IRS audit, and Republicans want to keep it that way," said Senator Wyden. "This bill is about making sure the IRS has the resources it needs to go after wealthy tax cheats while improving customer service for the vast majority of American taxpayers who follow the law every year."

The Stop Corporations and High Earners from Avoiding Taxes and Enforce the Rules Strictly (Stop CHEATERS) Act would restore and revitalize the IRS with additional funding for tax enforcement focused upon high-income tax evasion, technology operations support, systems modernization, and taxpayer services like free tax-payer assistance - and is expected to pay for itself several times over, given the extent of tax evasion among high earners and the positive impact of improved services to help lower- and middle-income taxpayers file their taxes. The Budget Lab at Yale has scored this bill as raising about $998 billion in net revenue over a ten-year window. For every dollar invested by this bill, the federal government will gain approximately $13 dollars in gross revenue.

Prior to receiving historic funding through the Inflation Reduction Act, the IRS suffered from decades of chronic underfunding, leading the agency to disproportionately audit lower income earners. As a result, it is estimated that corporations and high-income individuals with access to high-level accountants - frequently in the highest-income brackets -have been able to evade the taxes they owe, contributing to $1 trillion in lost revenue. This legislation would allocate over $83 billion to the IRS over the next decade to enable tax auditors to enforce the tax code fairly across the board and at all income brackets and provide crucial services to taxpayers.

"As Congress seeks ways to fund much-needed policy priorities and address our growing national debt, there is one common sense solution that should have unanimous bipartisan support: let's enforce the tax laws already on the books," said Senator King. "Our legislation will make sure the IRS has the resources it needs to confront the gap between taxes owed and taxes paid - while ensuring that our tax enforcement professionals are focused on the high-income earners who account for the most tax evasion. This is a serious problem with an easy solution; let's pass this legislation and make sure every American pays what they owe in taxes."

"For decades, billionaires and giant corporations have made tax evasion their hobby, and Republicans have enabled them by gutting the IRS," said Senator Warren. "Enough is enough. It's time to fund the IRS and make the rich pay their fair share."

"The Trump Administration's cuts to the IRS have made it harder for working Americans to get help with their taxes and easier for wealthy tax cheats to get away with not paying their fair share - which is unfair to law-abiding taxpayers and reduces funding for critical programs that support American families," said Senator Kaine. "I'm glad to be introducing this common-sense legislation with my colleagues to restore and expand IRS funding, allowing the agency to provide the level of customer service that Americans deserve and ensure that wealthy Americans don't get to evade taxes simply because they can hire expensive lawyers."

"The combination of Republicans' decimation of the IRS enforcement function and their Beautiful-for-Billionaires Law has made Tax Day a field day for wealthy tax cheats and a tough day for many hardworking families," said Senator Whitehouse. "Our bill would restore the funding the agency needs to enforce the law on the ultra-rich - who can afford armies of accountants to obscure cheating - while delivering the refund checks middle-class families wait all year for."

"Republican's continued cuts to the Inflation Reduction Act's funding for the IRS has left the agency underfunded and without the tools it needs to fairly enforce our tax laws-letting wealthy individuals and large corporations dodge paying what they owe, while working families are left to foot the bill," said Leader Schumer. "The Stop CHEATERS Act is about restoring basic fairness to our tax system. Ensuring wealthy Americans and large corporations pay their fair share is one of the most straightforward ways to both reduce the deficit and rebuild trust in our system."

More specifically, the Stop CHEATERS Act would:

• Restore and revitalize the IRS and ensure it is properly funded by providing over $83 billion in mandatory funding through Fiscal Year 2031, reversing both the rescissions to IRA funding and discretionary spending cuts to the IRS budget. This funding would be divided into four spending buckets and provide:
• • $45.6 billion for Enforcement to audit wealthy taxpayers and large corporations, pursue criminal investigations, and prevent financial crimes. The bill establishes a ramp-up period, increasing funding each year, allowing the IRS to gradually rebuild enforcement operations.
  • $25.4 billion for Technology and Operations Support to overhaul outdated technology and increase the agency's capacity to detect fraud and noncompliance.
  • $3.1 billion for Business Systems Modernization to improve, operate, and maintain internal systems.
  • $9.6 billion for Taxpayer Services to allow for pre-filing assistance and education, taxpayer advocacy services, and other forms of free taxpayer assistance.
• Instruct the IRS Commissioner to issue a report to Congress on the agency's plan to shift auditing and enforcement resources to high-income individuals and large corporations, a directive first launched under Commissioner Werfel in 2024. In addition, the plan must include efforts to recruit and retain skilled auditors for high-income individuals and large corporations that typically have complicated tax situations. The Office of the Treasury Inspector General for Tax Administration would be required to issue a report on the effectiveness of this plan.

In addition to Wyden, King, Warren, Kaine and Whitehouse, Senate Democratic Leader Chuck Schumer, D-N.Y., Michael Bennet, D-Colo., Richard Blumenthal, D-Conn., Lisa Blunt Rochester, D-Del., Cory Booker, D-N.J., Chris Coons, D-Del., Tammy Duckworth, D-Ill., Dick Durbin, D-Ill., John Fetterman, D-Pa., Ruben Gallego, D-Ariz., Martin Heinrich, D-N.M., John Hickenlooper, D-Colo., Andy Kim, D-N.J., Ben Ray Luján, D-N.M., Jeff Merkley, D-Ore., Gary Peters, D-Mich., Bernie Sanders, I-Vt., Brian Schatz, D-Hawai'i, Jeanne Shaheen, D-N.H., Chris Van Hollen, D-Md., Mark Warner, D-Va., and Peter Welch, D-Vt., joined the legislation.

"Sustained funding of and investment in the IRS is critical to the protection of taxpayer rights, including the right to quality service and the right to a fair and just tax system," said Nina E. Olson, Executive Director for the Center for Taxpayer Rights. "This bill helps achieve these important goals."

The Stop CHEATERS Act is endorsed by the following organizations: Third Way, Progressive Policy Institute, Taxpayers for Common Sense, Committee for a Responsible Federal Budget, National Treasury Employees Union, American Federation of Teachers, SEIU, AFSCME, Americans for Tax Fairness, Americans for Financial Reform, Small Business Majority, Main Street Alliance, Tax the Greedy Billionaires, Groundwork Action, Take on Wall Street, Public Citizen, Patriotic Millionaires, P Street, and the Institute on Taxation and Economic Policy.

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