When a new President comes into office, we expect a lot of changes to happen in federal policies and legislation. Regardless of your opinions about these changes, you need to know what these changes will do and how they may affect you personally, especially when there are changes in tax laws. Recently, President Biden has announced plans that could affect you and your taxes, so let’s take a look at what this means for you.
New IRS Funding Proposal
In his American Families Plan, President Biden is working to increase funding to the IRS, estimated to be about an $80 billion increase in funding. There are a couple of reasons President Biden is planning to increase IRS funding.
First, the IRS has been the target of several budget cuts in recent years, forcing them to cut their number of employees almost in half. However, their workload has not decreased, but increased, making it more and more difficult for the IRS to do everything they need to do. An increase in funding would help the IRS to regain the resources and manpower they need to do their work.
Second, because the IRS has lost funding and manpower, more people have been able to get away with tax evasion, which means the government hasn’t been receiving the money it needs to operate. The IRS has not had the resources to conduct necessary audits, particularly on the wealthy.
Third, President Biden hopes that added funding for the IRS will help diminish tax evasion and bring more funding for government efforts. His plan includes efforts to make education and child care (among other things) more accessible and affordable to more American families. By supporting the IRS in their auditing efforts, enough money may become available to make these plans a reality.
How New IRS Changes Can Affect You
Initially, the biggest change the new IRS policies will bring to you personally is a higher likelihood of being audited by the IRS. That doesn’t mean that you will be audited, but the IRS will have more resources to conduct audits and search for tax evasion.
But for most people, the likelihood of being audited won’t increase. The increased auditing would target wealthier people (mostly people who make more than $400,000 per year), so if you aren’t making that much, the IRS probably won’t focus on auditing you.
If you are in that wealthier group though, then carefully make sure that you are paying your taxes correctly. The tax code is complicated, so hiring experts to help you with your taxes is the best way to make sure that your taxes are paid correctly. The IRS may still audit you, but if you’ve done your best to pay taxes correctly, it will be much easier to work with the IRS in your audit defense than it would be if you were intentionally evading taxes.
If you do run into problems with the IRS, there are a few things you can do to make the process as smooth as possible:
Tips for Dealing With the IRS
1. Don’t Ignore the IRS
If the IRS reaches out to you, the worst thing you could do is ignore them. They have their reasons for reaching out or auditing you, and most of the time they just need more information from you. Cooperating with the IRS will make your life much easier and everything will be sorted out much faster.
2. Have Good Representation
Did you know that you don’t have to deal with the IRS on your own? The law allows you to have legal representation when you have problems with the IRS, so there’s no reason for you to try and figure everything out on your own. Again, tax codes are complicated and easy to misunderstand, so if you’ve tried to pay your taxes correctly but have still run into problems, having a professional tax attorney helping you with your audit defense against the IRS can be a huge help. US Tax Shield has plenty of experienced tax attorneys who can help you out, but more on that in a minute.
3. Do All You Can to Pay Debts
If the IRS finds that there was a mistake in your taxes, do what you can to pay it off. It may be frustrating, but your attorney will do all they can to make sure that IRS’s claims are correct. And if the claims are correct, the debt will need to be paid. The sooner the debt is paid, the quicker everything will be over, so do what you can to pay off the debt.
4. Try to Have Debt Settled
Sometimes, debts are hard to pay off. If you’ve tried every avenue to pay off your debt to the IRS and have still come up short, then talk with your attorney so they can try and have your debt settled with the IRS. This usually results in your debt being diminished, but it does take some negotiating with the IRS to prove that you are not able to pay the debt you owe.
How US Tax Shield Can Help You
When you’re dealing with audits from the IRS, you’re going to run into legal issues somewhere along the way. Additionally, you’ll likely be attempting to navigate the complicated world of taxes without a lot of experience doing so. The best thing you can do to make sure everything is sorted out in the best way possible is to hire an attorney from US Tax Shield.
One of the services we, at US Tax Shield, offer is audit defense. We make sure that your rights are respected and that you aren’t charged for anything you shouldn’t be paying. We’ve been very successful in helping other clients with their audit defenses, and we’re ready to serve you as well. And if audit defense isn’t quite what you need, don’t worry. We also offer assistance with IRS settlements, unfiled tax returns, business tax, and much more. Reach out to us today to find out how we can help you!
