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  • 2022-08-31 (xsd:date)
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  • The IRS is not expanding its workforce because of Biden’s student loan forgiveness (en)
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  • What if Joe Biden’s move to forgive the student debt of more than 40 million Americans is not meant to provide more breathing room to Americans, as his administration said , but part of a self-serving plot to increase government revenue? An Aug. 29 Facebook post claims that Biden's student debt relief plan is simply a scheme to increase taxable income. The post, from a page called Don’t Trust Government, says the forgiven debt shows up as income, which turns people into net tax-payers, pushes them into higher tax brackets, and increases the amount of federal income tax the government collects. People who misreport on their $10k - $20k increased income will be audited by the new army of 87,000 IRS agents, the post says. The post was flagged as part of Facebook’s efforts to combat false news and misinformation on its News Feed. (Read more about our partnership with Facebook .) But the forgiven debt will not be treated as taxable federal income, thanks to the American Rescue Plan, the pandemic stimulus package President Joe Biden signed into law last year. It included a provision to exclude counting federal student loan relief as taxable income through 2025. Six states — Arkansas, Massachusetts, Minnesota, Mississippi, Wisconsin and North Carolina — could impose a tax on the forgiven debt, though. And while the IRS does expect to use Congressional funding to expand its workforce after years of budget cuts, the 87,000 figure is a bit misleading. It originated in a 2021 Treasury Department assessment of what the IRS would do with $80 billion in funding over 10 years. But the report did not say that the new hires would all be agents working in enforcement, and some of the money would go toward modernizing technology and offering taxpayer services. While the Treasury is expected to make new hires, it is still finalizing how it will allocate the newly approved funds. Simultaneously, an estimated 50,000 employees are expected to retire in the next five to six years, the Treasury Department told PolitiFact in early August. Treasury Secretary Janet Yellen said audit rates for households making less than $400,000 would not increase and enforcement resources would focus on high-end taxpayers, Reuters reported. I direct that any additional resources — including any new personnel or auditors that are hired — shall not be used to increase the share of small business or households below the $400,000 threshold that are audited relative to historical levels, Yellen wrote Aug. 10 . Our ruling A recent Facebook post said the IRS is hiring an army of 87,000 agents to deal with a surge in federal tax income resulting from Biden’s student debt relief plan. The IRS plans to increase its workforce, but over 10 years, not all at once. Many of the new hires are expected to come onboard as 50,000 current IRS workers retire. And forgiven student loan debt will not be taxed federally, though it might be subject to state taxes in some places. We rate the post False. (en)
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