A former IRS whistleblower says the middle class is being targeted under the inflation law
William Henk, the former Internal Revenue Service attorney who was forced out after filing allegations of domestic wrongdoing, said the government will target middle-income Americans with new audits under the Inflation Cut Act.
Henck, who worked at the IRS for 30 years until leaving in 2017, has criticized the IRS and others who argued that the additional funding would only increase scrutiny of billionaires and corporations. The Inflation Reduction Act, which President Biden signed into law, would nearly double the IRS budget, allocating an additional $79 billion to the agency over the next decade.
“The idea that they’re going to open things up and go after these big billionaires and big corporations is absolutely noisy,” Henk told FOX Business in an interview. “It’s not going to happen. They will give themselves really great bonuses, promotions and conferences.”
He continued, “It is possible that the big companies and billionaires are sitting laughing now.”
Henk added that he thought it was “crazy” to double the agency’s budget. He said the IRS would target companies that do not have enough money to hire Washington lobbyists.
Americans with annual incomes of less than $75,000 will be subject to nearly 711,000 new IRS audits under the legislation, according to a House GOP analysis that used historical audit rates. By comparison, individuals who make more than $500,000 will receive about 95,000 additional audits as a result of the Inflation Reduction Act.
However, IRS Commissioner Charles Rettig dismissed the reports of the new audits, saying that “audit rates” would remain the same and that the bill was “absolutely not about increasing audit scrutiny for small businesses or middle-income Americans.” White House press secretary Karen Jean-Pierre told reporters last week that there will be no new audits for people earning less than $400,000 a year.
“There would be a huge incentive basically to get rid of the taxpayers, and the advantage the IRS has is that they have essentially unlimited resources and are not accountable, while the taxpayers have to balance the cost of accountants and tax attorneys—fighting something in tax court ‘,” Henk told FOX Business.
Henk said new employees at the IRS will also be assigned simpler cases, which means an extra focus on small business audits.
He continued, “If you own a roofing company, you better rely on being audited because that’s what they’ll do.” “They will go after car dealerships and roofing companies.”
Henk said that during his time at the agency, he observed IRS agents specifically targeting elderly taxpayers, some of whom were World War II veterans, because they could easily be forced to live in settlements.
“I needed it internally and externally, but I was ignored,” he told FOX Business. “In their last days on earth, these taxpayers were being bullied by the same government they fought for when they were young and nobody cared.”
“This is the agency that will double in size.”
In 2013, Henk told the Washington Post that an IRS team tasked with advising on legal issues had told him senior officials to “step aside” while investigating a paper company that had benefited from the biofuel tax credit. Henk, who believed the credit was taxable, said the company did not include the credit as taxable income in its returns, an issue his team identified as a potential problem.
Henk added that other paper companies quickly filed claims for refunds after the IRS backtracked on its investigation into the company’s tax credits classification. As a result, the federal government paid paper companies $8 billion in 2009 amid the financial crisis, the Washington Post reported at the time.
The IRS then opened an investigation into Henk for allegedly revealing sensitive information when he spoke to the media in 2013, which led to his termination in 2017.