The Inflation Reduction Act, intending to reduce inflation, has now passed the U.S. Senate earlier this month. While the bill emphasizes on investing in domestic energy production, reduce carbon emissions by 2030, and lower drug prices, it also provides the IRS of a funding they have long been waiting for.
The Senate just approved $80 billion in IRS funding. This include over $45 billion for enforcement efforts such as audits. With this boost, nearly $204 billion in revenue is projected over the next decade. After multiple funding attempts and months of speculation, the IRS officials are nearing their goal to get the means they need.
The IRS is also planning to hire more than 87,000 employees to support its activities. Further details and precise department restructuring will follow in the upcoming months.
IRS Audits Expected to Increase
With more funding, the IRS will benefit from additional resources to supplement audit efforts. Self-employed taxpayers may naturally represent the category the most impacted according to tax experts nationwide. IRS agents already seem more incline to enforce compliance as many taxpayers across the country have started to receive their visits.
Tougher enforcement through the new founding aims to close what is known as the “tax gap”. This term refers to the difference between the amount of tax revenue actually collected by the government and what taxpayers actually owe. According to IRS Commissioner Charles Rettig, this “tax gap” could be as much as $1 trillion a year.
In spite of the announcement, audits should not increase for taxpayers or small businesses making less than $400,000 a year, still uncertainties remain on how exactly the IRS will ramp up its collection activities. Even though being compliant has always been a requirement for all taxpayers, many will now have to proactively pay or negotiate back taxes with tax authorities. So as to filing tax returns.
Because tax laws regularly change, it may be overwhelming and stressful to deal with the IRS or State agencies. Hiring legal representation for your tax needs might be a solution, however it is important to ensure these professionals are, ethically, providing adequate expertise without making false promises.
Need Help? We Are Here to Help.
Negotiating with the IRS or filing your taxes may seem like a daunting and scary task. As a leader in tax relief services for over 22 years, US Tax Shield can help you navigate your tax problems and ease the stress so you can move forward with your life. We’ve helped thousands of individuals, sole proprietors, partnerships, and corporations resolve their most challenging IRS and state tax problems. Contact us today at (877) 829-3535 for a FREE, NO OBLIGATION consultation with professional tax experts.
