Mr Biden could take administrative steps to shift enforcement priorities without the involvement of Congress, what with I.R.S. and the recruitment and assignment of current workforce. For substantial new investments or enforcement measures, however, Congress would have to approve new funding.
It may be easier to get at least some Republican support for stronger efforts to enforce tax law than it is to raise tax rates. In particular the I.R.S. Commissioner Charles Rettig, a Trump-appointed representative, has repeatedly urged more funding and outlined the need to reduce the tax gap, including for high earners.
Mr. Rossotti, the former I.R.S. Commissioner said: “The idea is to prop up the system and make it fairer to everyone. It is unlikely that there will be any real size tax hike, but this is about keeping the tax system sound and raising money through enforcement of taxes that are already on the books. "
The extent of the tax gap and its propensity for higher-income Americans not only reflect a declining I.R.S. Enforcement budget, but also a shift in the organization of companies. President Trump's tax strategies reported by The Times earlier this year provide an extreme example of the tactics responsible for billions in losses at the Treasury Department.
In the past generation, many American companies have moved away from traditional "C-companies," owed corporation tax and the I.R.S. has many years of experience in auditing "S-companies" or partnerships, companies that pass on their income to individuals who in turn pay individual income taxes. But I.R.S. Enforcement has not kept pace with this shift, and partnerships and suburban firms are rarely scrutinized. Only 0.3 percent of them were in 2017.
A distinctive feature of these companies is that they have a single owner or a small group of partners so that their financial conduct is barely monitored from outside. Important financial information is not independently reported to the government, so they can hide information from their tax advisor or find someone who looks the other way.
Individuals who earn wages have given this income to the I.R.S. from their employer. And at the other extreme, while the largest corporations have aggressive strategies to reduce their corporate tax burdens, they have independent boards of directors and auditing firms whose reputations stand in the way of going underground.