(by: Dr. D. Lavelda Davis, EA)
The Inflation Reduction Act was enacted on August 16th 2022. The purpose of the Act is to assist in inflation relief and to support economic growth. The law, in part, reduces the cost of hearing aids, prescription drugs, gives tax credits for solar roofs, rebates for energy efficient home appliances, and tax credits for electric vehicles, to name a few. The revenue for this bill is 737 billion. Out of that 737 billion, about 124 billion has been allocated for IRS tax compliance and enforcement.
One Hundred and twenty Four billion for enforcement? Wow! The previous budget was approximately 17 billion with about 5 billion going toward enforcement. Now that’s an increase.
The IRS plans to use the funds toward: collection efforts to collect taxes already owed, imposing a 1% excise tax on the fair market value of stock repurchased by a corporation, and an Alternate Minimum Tax (AMT), and modernizing their systems. The IRS estimates this to be approximately 160 billion. They plan to hire Revenue Officers and Agents, which are the main arm of the enforcement division. Currently, the IRS employs approximately 73,000 employees. They plan to hire 87,000 more employees. That is over a 100% increase in personnel. Oh Boy!
Now, obviously this won’t happen overnight. Agents / Officers need to be trained, systems and equipment need to be updated etc. But do you want to wait until they are ready for full enforcement?
For those taxpayers making $400,000 or will not not see a tax increase. But what about those same taxpayers who currently have an insurmountable tax bill that they cannot pay?
The IRS Commissioner stated, “No one can get a better deal for taxpayers than they can usually get for themselves by working directly with the IRS to resolve their tax issues.” Really?! Meanwhile, the commissioner was in private practice for a number of years representing high wealth Beverly Hills clients. So, this statement may be questionable.
Other facts to consider:
– There are approximately 10.5 million returns currently waiting to be processed.
– Of those 10.5 million, 2.3 million are amended returns
– The IRS received 73 million phone calls
– Only 7 million were answered
– Correspondence delays went from 74 days to 251 days
– The IRS is owed about One Trillion dollars from about 50 million taxpayers
Are the taxpayers ready for the onslaught? Act now to avoid aggressive, relentless pressure from the largest (and now larger) enforcement agency in the country. Hire not just a tax person, but a tax company, which specializes in tax resolution.
Tax Defender USA is an established Wall Street company specializing in tax resolution, reducing or even eliminating federal and state liabilities. Call now for a free consultation.