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Column: Something for Biden to brag about — his IRS funding more than pays for itself

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Column: Something for Biden to brag about — his IRS funding more than pays for itself

It goes without saying that President Biden will take the podium for Thursday’s State of the Union address armed with facts and figures of all that he’s accomplished for the American people during his term. All presidents do.

Here’s one item we hope he doesn’t fail to mention: By arming the Internal Revenue Service with billions of dollars in new resources, he has generated many more billions of dollars in tax revenues. And without raising tax rates.

That’s the outcome of a provision of the Inflation Reduction Act of 2022, which endowed the IRS with $80 billion in new funding over 10 years. About $20 billion of that is being rescinded as the GOP’s price for an agreement to raise the federal debt ceiling, but what’s left is still enough to start restoring the agency’s tax collection efforts.

A taxpayer who is audited in 2024 and found to have underreported tax will voluntarily pay more tax in 2025, 2026, and beyond.

— Internal Revenue Service

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The Treasury Department recently reported that it’s money well spent, in spades. The full $80-billion appropriation would produce $561 billion in increased revenues; the $20-billion give-back would reduce that by $100 billion. If the higher level of funding were renewed after it expires, Treasury says, the new revenues could reach $851 billion.

That includes not only direct recovery of unpaid taxes but what the IRS calls “specific deterrence.” As the agency explains, “a taxpayer who is audited in 2024 and found to have underreported tax will voluntarily pay more tax in 2025, 2026, and beyond.”

Do the math, and it turns out that every dollar spent on shoring up the enforcement and efficiency capabilities of the IRS produces about $6 in gains.

To a great extent, that return comes from enforcement efforts aimed at the richest Americans, who have consistently reigned as our leading tax cheats. Millionaires and billionaires have been evading about $150 billion a year, IRS Commissioner Danny Werfel told CNBC last month.

Every hour a government auditor spends scrutinizing a return declaring $5 million of income unearths nearly $3,500 in unpaid taxes, according to the Government Accountability Office; for returns reporting $10 million or more, the yield is more than $13,000 per hour. It’s hard to imagine a better bang for the government buck.

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Under Biden, the IRS has been able to start reversing the historical free ride on tax compliance enjoyed by corporations and the rich. “Tax cheating became almost risk-free for the wealthiest Americans during the Trump years,” David Cay Johnson reported recently in the Nation.

This is a crime highly corrosive to American society — taxes unpaid by the wealthy only land on the backs of lower-income taxpayers, and the perception of the rich getting away with it even as they increase their share of national income eats away at the public’s respect for government generally.

All this should provide some perspective on the partisan tug of war staged by the Republican Party over IRS funding in recent years. After the Inflation Reduction Act passed Congress without a single Republican vote, GOP lawmakers threw a conniption over the IRS appropriation.

They depicted the 87,000 workers who might be hired with the appropriation as an army of jackbooted thugs poised to knock down the doors of ordinary Americans. “We should stop the weaponization of the tax code, abolish the IRS, and start over,” Sen. Ted Cruz (R-Texas) declared in a typically feverish broadside.

What Cruz and his fellows don’t seem to understand is that raising taxes on the wealthy and cracking down on their tax breaks is overwhelmingly popular among the voters — including Republicans — as Timothy Noah observed in the New Republic.

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The truth is that the ability of the IRS to enforce the law against the most determined cheats had been hobbled for decades — by budget cuts enacted by Republicans and Democrats alike. From 2011 to 2019, the audit rate of returns reporting $1 million or more in income fell from 7.2% to 0.7%, according to the IRS. In the same period, the audit rate of large corporation returns fell from 10.5% to 1.7%.

Findings of unpaid taxes among those earning $1 million or more, and especially those earning $10 million or more, soared after the IRS began cracking down on scofflaws in 2020.

(Government Accountability Office)

Oversight of the wealthiest Americans had gotten so embarrassingly low that then-Treasury Secretary Steven Mnuchin ordered the IRS in 2020 to audit at least 8% of returns reporting $10 million in income or more every year.

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Reviving the enforcement capability at the IRS was no simple matter. Years of attrition had sapped the agency’s expertise at analyzing the complex finances of the 1%.

Training new auditors takes two to three years. High-income and high-wealth individuals and their representatives often “intentionally delay or obstruct the audit,” according to the Government Accountability Office. “For example, … taxpayers or their representatives might take the maximum amount of time to provide the minimum amount of information to the auditor.”

Still, the IRS has materially stepped up its targeting of millionaires and billionaires. In January, Werfel reported that over the previous year the IRS had collected $520 million in unpaid taxes from some 1,600 rich scofflaws — thus far.

Last month, the IRS sent letters to 125,000 high-income households that hadn’t filed tax returns since 2017, advising them to get right with the government “immediately” by paying their delinquent tax, interest and penalties. The mailings went out to more than 25,000 recipients with more than $1 million in income and more than 100,000 of those with incomes between $400,000 and $1 million.

The agency is also taking a closer look at schemes through which corporations and wealthy taxpayers are known to shelter their income illicitly. That includes unwarranted business deductions for corporate jets actually used for personal travel, which should be treated as income.

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Meanwhile, Senate Finance Committee Chair Ron Wyden (D-Ore.) has launched a committee investigation of business deductions taken by multimillionaire Harlan Crow on his superyacht Michaela Rose by declaring it a vessel for business charters. Wyden asserted in a letter to Crow’s lawyer that there’s no evidence the yacht has been registered as a charter vessel, but instead has been used for pleasure cruises by Crow, his family and his guests.

Crow has been in the news as a generous benefactor to Supreme Court Justice Clarence Thomas, who reportedly traveled on the yacht to several locations around the world, Wyden observed. By taking deductions for charter losses and maintenance costs, Wyden asserted, “Mr. Crow appears to have claimed to lower his tax liability by millions of dollars.”

The most important outcome of Biden’s approach to tax enforcement is curing corporations and the wealthy of their poor taxpaying hygiene. They’ve gotten away with evading their responsibilities for so long that they came to see the IRS as their own entitlement program. The rest of us have been paying for that. A newly vigilant IRS, in effect, puts our money back in our pockets.

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Video: Why Your Paycheck Feels Smaller

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Video: Why Your Paycheck Feels Smaller

new video loaded: Why Your Paycheck Feels Smaller

Ben Casselman, our chief economics correspondent, explains why wages are not keeping up with inflation and what that means for American workers and the economy.

By Ben Casselman, Nour Idriss, Sutton Raphael and Stephanie Swart

April 18, 2026

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Civil case against Alec Baldwin, ‘Rust’ movie producers advances toward a trial

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Civil case against Alec Baldwin, ‘Rust’ movie producers advances toward a trial

Nearly two years after actor Alec Baldwin was cleared of criminal charges in the “Rust” movie shooting death, a long simmering civil negligence case is inching toward a trial this fall.

On Friday, a Los Angeles Superior Court judge denied a summary judgment motion requested by the film producers Rust Movie Productions LLC, as well as actor-producer Baldwin and his firm El Dorado Pictures to dismiss the case.

During a hearing, Superior Court Judge Maurice Leiter set an Oct. 12 trial date.

The negligence suit was brought more than four years ago by Serge Svetnoy, who served as the chief lighting technician on the problem-plagued western film. Svetnoy was close friends with cinematographer Halyna Hutchins and held her in his arms as she lay dying on the floor of the New Mexico movie set. Baldwin’s firearm had discharged, launching a .45 caliber bullet, which struck and killed her.

The Bonanza Creek Ranch in Santa Fe, N.M. in 2021.

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(Jae C. Hong / Associated Press)

Svetnoy was the first crew member of the ill-fated western to bring a lawsuit against the producers, alleging they were negligent in Hutchins’ October 2021 death. He maintains he has suffered trauma in the years since. In addition to negligence, his lawsuit also accuses the producers of intentional infliction of emotional distress.

Prosecutors dropped criminal charges against Baldwin, who has long maintained he was not responsible for Hutchins’ death.

“We are pleased with the Court’s decision denying the motions for summary judgment filed by Rust Movie Productions and Mr. Baldwin,” lawyers Gary Dordick and John Upton, who represent Svetnoy, said in a statement following the hearing. “He looks forward to finally having his day in court on this long-pending matter.”

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The judge denied the defendants’ request to dismiss the negligence, emotional distress and punitive damages claims. One count directed at Baldwin, alleging assault, was dropped.

Svetnoy has said the bullet whizzed past his head and “narrowly missed him,” according to the gaffer’s suit.

Attorneys representing Baldwin and the producers were not immediately available for comment.

Svetnoy and Hutchins had been friends for more than five years and worked together on nine film productions. Both were immigrants from Ukraine, and they spent holidays together with their families.

On Oct. 21, 2021, he was helping prepare for an afternoon of filming in a wooden church on Bonanza Creek Ranch. Hutchins was conversing with Baldwin to set up a camera angle that Hutchins wanted to depict: a close-up image of the barrel of Baldwin’s revolver.

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The day had been chaotic because Hutchins’ union camera crew had walked off the set to protest the lack of nearby housing and previous alleged safety violations with the firearms on the set.

Instead of postponing filming to resolve the labor dispute, producers pushed forward, crew members alleged.

New Mexico prosecutors prevailed in a criminal case against the armorer, Hannah Gutierrez, in March 2024. She served more than a year in a state women’s prison for her involuntary manslaughter conviction before being released last year.

Baldwin faced a similar charge, but the case against him unraveled spectacularly.

On the second day of his July 2024 trial, his criminal defense attorneys — Luke Nikas and Alex Spiro — presented evidence that prosecutors and sheriff’s deputies withheld evidence that may have helped his defense . The judge was furious, setting Baldwin free.

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Variety first reported on Friday’s court action.

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California’s gas prices push Uber and Lyft drivers off the road

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California’s gas prices push Uber and Lyft drivers off the road

The highest gas prices in the country are making it tougher for some gig drivers to make a living.

Gas prices have shot up amid the war in the Middle East. On average, California gas prices are the most expensive in the United States, according to data from the American Automobile Assn. The average price of regular gas in California is almost $6. The national average is a little above $4.

While Uber and Lyft drivers have concocted clever ways to cut gas consumption, they say that without some relief they will be forced to leave the ride-hailing business.

John Mejia was already struggling to make money as a part-time Lyft driver when soaring gas prices made his side hustle even harder.

“Unfortunately, it’s the economics of paying less to drivers and gas prices,” he said. “It actually is pulling people out of the business.”

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Guests at The Westin St. Francis hotel get into an Uber.

(Jess Lynn Goss / For The Times)

Gig work offers drivers the freedom to work for themselves and more flexibility, but being independent contractors also means they must shoulder unexpected costs.

Ride-sharing companies say they’re trying to help, but drivers say the gas relief comes with caveats. For now, drivers say they’re being pickier about what rides they accept, cutting hours and are looking at other ways to make money.

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Mejia, who started driving for Lyft more than a decade ago, said in his early days, he would sometimes make $400 in three hours. Now it takes 12 hours to rake in $200.

The San Francisco Bay Area consultant is an active member of the California Gig Workers Union, so he knows he isn’t alone. California has more than 800,000 gig rideshare drivers, according to the group, which is affiliated with the Service Employees International Union.

On social media sites such as Reddit and Facebook, gig workers have posted about how the higher gas prices are eating into their earnings. Among the tricks they are suggesting: reducing the number of times the ignition is turned on or off, avoiding traffic, working in specific neighborhoods and at times with high demand and switching to electric vehicles.

Gig drivers usually have only seconds to decide whether to accept a ride on the app, but they have become more strategic about which rides and deliveries they accept.

That means they are more likely to sit back in their cars and wait for higher fares for quick pick-up and drop-off.

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“I highly recommend the ‘decline and recline’ strategy, rejecting unprofitable rides until a better one appears,” wrote Sergio Avedian, a driver, in the popular blog the Rideshare Guy.

Pedestrians cross the street in front of a Lyft and Uber driver.

Pedestrians cross the street in front of a Lyft and Uber driver on Wednesday. High gas prices have made it hard for gig drivers to make a living, cutting into their profits.

(Jess Lynn Goss / For The Times)

Uber, Lyft and other companies have unveiled several ways to help drivers save on gas.

Uber said drivers can get up to 15% cash back through May 26 with the Uber Pro card, a business debit Mastercard for drivers and couriers. Based on a worker’s tier, they can get up to $1 off per gallon of gas through Upside — an app that offers cash rewards — and up to 21 cents off per gallon of gas with Shell Fuel Rewards. The company also offers incentives for drivers who want to switch to electric vehicles.

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“We know the price of gas is top of mind for many rideshare and delivery drivers across the country right now,” Uber said in a blog post about its gas savings efforts.

Lyft also said it’s expanding gas relief through May 26 because the company knows that the extra cost “hits hardest for drivers who depend on driving for their income.”

The company is offering more cash back, depending on the driver’s tier, for drivers who use a Lyft Direct business debit card to pay for gas at eligible gas stations. They can get an additional 14 cents per gallon off through Upside.

Drivers say the fine print on the offers dictates which card they use and where they fill up gas, making it difficult for them to save money.

“If I do the math, it’s ridiculous,” Mejia said. “They’re offering us nothing.”

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Uber declined to comment, but pointed to its blog post about the gas relief efforts. Lyft also referenced the blog post and said “the gas savings were structured through rewards to maximize stackable opportunities.”

Guests at The Westin St. Francis hotel get into an Uber.

Guests at The Westin St. Francis hotel get into an Uber.

(Jess Lynn Goss / For The Times)

Gig workers have struggled with rising gas prices in the past.

In 2022, Lyft and Uber temporarily added a surcharge to their fares amid record-high gas prices following Russia’s invasion of Ukraine. This year, Uber is adding a fuel charge to its fares in Australia for roughly two months to offset the high cost of gas for drivers. Lyft said it hasn’t added a fuel charge in the U.S. or elsewhere.

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Margarita Penalosa, who drives full time for Uber and Lyft in Los Angeles, started as a rideshare driver in 2017. Back then, gas was cheaper. She would easily hit her goal of making $300 in eight hours. Now she’s making just $250 after working as much as 14 hours.

Gas prices, she said, used to be less than $3 per gallon. Now some gas stations are charging more than $8 per gallon.

“Take out the gas. Take out the mileage from my car and maintenance. How much [do] I really make? Probably I get $11 for an hour,” she said.

Jonathan Tipton Meyers wants to spend fewer hours as a rideshare driver.

He already juggles multiple gigs even while driving for Uber and Lyft in Los Angeles. He’s a mobile notary and loan signing agent, a writer and performer.

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Driving is “a very challenging, full-time job,” he said. “It’s very taxing and, of course, wages were just continually decreasing.”

A man stands for a portrait in a white button up shirt

John Mejia, a longtime Lyft and Uber driver, poses for a portrait before attending a meeting about unionizing gig drivers.

(Jess Lynn Goss / For The Times)

Even if oil continues to flow through the Strait of Hormuz, which Iran reopened Friday, it could take a while for gas prices to come down to earth, said Mark Zandi, the chief economist at Moody’s Analytics.

“There’s an old adage that prices rise like a rocket and fall like a feather,” he said. “I think that’ll apply.”

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In the meantime, it will be survival of the fittest drivers. If enough of them decide to leave the apps, the ride-hailing companies could be forced to raise fares further to attract some back.

“Those who approach rideshare driving strategically, tracking expenses, choosing trips carefully, and optimizing efficiency are far more likely to weather periods of high gas prices,” wrote Avedian in the Rideshare Guy blog. “For everyone else, a spike at the pump can quickly turn rideshare driving from a side hustle into a money-losing venture.”

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