Alexis Leondis, Columnist

Will Biden's IRS Be Coming After You?

Most taxpayers needn’t obsess about a White House plan to toughen enforcement. Here are the big exceptions.

Some people are going to need it.

Photographer: Andrew Harrer/Bloomberg
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President Joe Biden wants to give the Internal Revenue Service sharper teeth. He’s proposed increasing the agency's funding by almost 70% so it can better police tax avoidance and evasion. The focus is supposed to be on wealthy taxpayers and corporations, since they're the ones who account for the majority of tax misconduct, but what does that mean exactly? Who should be on notice?

Most at risk are taxpayers whose earnings aren’t reported to the IRS by an outside source like an employer or brokerage firm. Studies show that when there's third-party reporting, compliance rates are around 90%, but when there isn't, the rate drops to 50%.