A recent spending bill passed by Congress includes funding to hire an additional 87,000 IRS agents.
Why so many?
While they may chase after rich offenders of the tax code, I believe there is a more ominous purpose.
Take a moment and go to www.irs.gov/taxtopics/tc431.
Here one will learn that a “forgiven debt” is considered “income” by the IRS.
IRS Publication 4681 also addresses this issue.
The number given by President Joe Biden is 26 million young people who will “benefit” from the student loan debt “forgiveness” program.
The amount of taxpayer cost for this relief has been placed at $400 billion.
The taxable funds that might potentially be captured from this debt forgiveness could amount to as much as 22% (15% tax plus 7.65% for SSA/Medicare) of $400 billion, which is $88 billion dollars.
Each of the 87,000 IRS agents would need to collect from 298 persons benefiting from loan forgiveness in order to cover all 26 million beneficiaries.
This seems like a reasonable workload.
I understand and add this disclaimer that in some cases, even with the debt forgiveness income, taxes may not be owed due to an individual’s financial situation.
However, there should be little doubt that the IRS will come looking for its share of the forgiven debt and will likely collect something.
There is a big difference between owing a bank and owing the IRS.
But you have to admire those political leaders on the left. The banks have their loan exposures reduced, the students have a portion of the student loans forgiven and the government collects a newfound tax source.
David M. Lutz
Altoona
