Treasury Secretary Janet Yellen urged Congress on Tuesday to approve $80 billion in funding for the Internal Revenue

Service to help reduce a backlog of tax returns and pursue unpaid taxes worth $600 billion.

Yellen told a Senate Finance Committee hearing on Treasury's budget request for fiscal 2023 that the IRS is under siege and underinvested.

Yellen said she faced huge problems at the agency, including a "huge backlog" in processing tax returns,

And a lack of personnel to handle complicated audits of higher-income taxpayers. According to, as of May 27

The IRS had 10.2 million unprocessed individual returns, including 8.2 million paper returns.

The IRS, according to Senator Robert Casey, has all but stopped auditing the tax returns of wealthy business owners

Who are eligible for a 20% tax deduction on their personal tax returns, while audit rates for lower-income individuals receiving

the Earned Income Tax Credit (EITC) are five times higher. According to Yellen, those statistics are appalling, and she is concerned about the estimated tax gap

Which she attributed to wealthy taxpayers with opaque income sources. Yellen told the committee that as

a result of IRS resource cuts, they have largely stopped auditing high-income taxpayers that are complicated, the ones that are harder to audit. 

The fact that so much of the IRS's resources go toward auditing the EITC is unfair.

Treasury's request for $80 billion over ten years, Yellen said, would allow the IRS to "ensure that people are paying their taxes."

As things stand now, it's unfair to lower income workers, she said.

(Reporting by Andrea Shalal; additional reporting by David Lawder; editing by Bill Berkrot and David Gregorio)

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