Many members of the Republican Party have insinuated that there is rampant fraud within the Social Security disability process, which we have indicated on several occasions that this is simply not the truth. Rather than go into further detail explaining why this myth wrong, why don’t we focus on somewhere fraud really exists and this fraud too hurt Social Security by reducing massive amounts of taxes that should be included in the agency’s disability and retirement trust funds.
The Center on Budget and Policy Priorities recently released a report on an increasing trend where employers are non compliant paying employment taxes and the Internal Revenue Service’s inability to recover lost revenues and investigate fraud.
This report estimates that more than 1 million employers owed more than $45 billion in unpaid employment taxes as of December of 2015.
This lack of authorized tax dollars reduces federal revenues and reduces the amount of money that is supposed to be paid into Social Security and Medicare. The Treasury Inspector General for Tax Administration (TIGTA) found that the number of employers with five or more years of unpaid employment taxes has risen more than 65 percent in about 8 years and has tripled in less than 20 years. The IRS has struggled with enforcement of employer paid taxes because funding for enforcement has been reduced by about 20 percent since 2010.
Incoming Treasury Sec. Steven Mnuchin acknowledged this crisis during his confirmation hearing and has asked for increased IRS resources to improve enforcement of employer paid taxes, but it has fallen on deaf ears in the White House. President Donald Trump’s proposed 2018 fiscal year budget asks for a reduction of IRS funding by $239 million. It would be nice to see the Republican Party get as outraged about this as it does if a poor person is paid too much in Social Security benefits.
