04.29.21 | Blog Posts
President Biden To The IRS: Resources Are On The Way
The Insider: White Collar Defense and Securities Enforcement
While the IRS postponed “Tax Day” from April 15 to May 17 this year, tax enforcement has received substantial attention in recent weeks culminating in President Biden’s proposal to boost the IRS’s budget (previewed here and here). The desire to make a massive investment in the IRS is attributable to three interrelated issues: concerns regarding how to pay for the Biden administration’s domestic priorities; substantial increases in estimates of the so-called tax gap, which reflects the difference between the amount of taxes that are owed and taxes that are collected; and the perennial hope that revenue shortfalls can be filled through increased enforcement. While it is tempting to view increased enforcement as a panacea to cure budget shortfalls, it is important to be clear-eyed about just how much additional revenue can really be raised and how quickly the floodgates will open.