William Henck is a former Internal Revenue Service (IRS) lawyer who was fired after making accusations of internal malfeasance. He said that the government would target middle-income Americans through new audits under The Inflation Reduction Act.
Henck worked for the IRS for over 30 years, until he left in 2017. He criticized the IRS and those who claimed that additional funding would only increase audits of billionaires and corporations. President Biden will sign the Inflation Reduction Act this week. It would almost double the IRS budget and provide $79 billion in additional funding for the agency over the next ten years.
Henck said in an interview that the idea of them opening up and going after big billionaires and large corporations was “quite frankly bulls–t.” It’s unlikely to happen. They will give themselves bonuses, promotions, and very nice conferences.”
He continued, “The billionaires and big corporations are probably laughing right now.”
Henck said that he believed it was insane to increase the budget of the agency. He stated that the IRS would target businesses with insufficient funds to pay Washington lobbyists.
According to an analysis of historic audit rates, Americans earning less than $75,000 per year would be subject to almost 711,000 additional IRS audits. The Inflation Reduction Act will result in approximately 95,000 additional audits for individuals earning more than $500,000, by comparison.
Charles Rettig, the IRS Commissioner, rebutted reports about new audits. He said that “audit rates would remain the same” and that the bill wasn’t about increasing audit scrutiny of small businesses or middle-income Americans. Last week, Karine Jean-Pierre, White House Press Secretary, stated to reporters that no new audits would be conducted for those earning less than $400,000 annually.
Henck stated that there will be a lot of incentive to “shake down taxpayers”. The advantage of the IRS is they have practically unlimited resources and no accountability. A taxpayer must weigh the costs of accountants and tax lawyers, as well as fight something in tax court.
Henck stated that new hires to the IRS will be assigned simpler cases. This means an increased focus on small-business audits.
He said, “If you own roofing companies, you should expect to get audited.” They’ll be targeting your roofing companies and car dealerships.
Henck stated that he saw IRS agents targeting elderly taxpayers who were World War II vets during his time at the agency. They could force them into settlements.
He stated, “I protested both internally and externally, but it was ignored.” “These taxpayers were being bullied in their final days on Earth by the same government that they fought for as young men, and no one cared.”
“This agency is going to double its size.”
Henck stated to the Washington Post in 2013 that senior IRS officials told him to “stand down” as he investigated a paper company that took advantage of a biofuel credit. Henck believed that the credit was taxable and said that the company didn’t declare the credit as taxable income on its returns. This was something his team considered a potential problem.
Henck said that other paper companies filed refund claims quickly after the IRS stopped investigating the classification of tax credits for the company. According to the Washington Post, $8 billion was paid by the federal government to paper companies in 2009, during the financial crisis.
Henck was then investigated by the IRS for allegedly disclosing sensitive information to the media in 2013. This led to Henck’s termination in 2017.
