Making Finances Simple. Changing Lives.
In a recent report to the Secretary of the Treasury, the IRS revealed how it will spend its $80 billion in funding received from the 2022 Inflation Reduction Act provisions…
Many of our clients have expressed concern that the IRS will now be targeting middle class folks for audits.
According to its operating plan report for the next decade, the IRS detailed a plan to accomplish 3 main goals:
This is a HUGE need due to the decline in IRS staff over the past 15 years, at a time when tax law has only become more involved, with numerous added complexities due to COVID and a changing economy.
We can say from experience this is already working to some extent. Calls are certainly being answered quicker and tax returns processed more efficiently.
The coming changes in technology modernization and taxpayer tools should provide a nice boost in productivity in the way of IRS & taxpayer interaction.
Over $45 billion of the funds are said to be allocated towards enforcement. That’s a huge chunk that rightfully stokes fears in many Americans.
However, audits have always been heavily weighted toward wealthier Americans, primarily because there’s more “juice for the squeeze”. This trend will no doubt continue since there’s a clear focus on accountability for the wealthy in today’s political climate.
So while audits are a bummer because of the time needed to address them, taxpayers with clean and accurate records needn’t be afraid.
Systems & Technology
The IRS has been stuck in the 20th century for way too long. There are many efficiencies that this new funding should help accomplish through technology improvements. And we have seen improvements already with added online tools.
Heavy focus is being placed on automated systems to lighten the load on manual IRS contact, as well as shorten consumer time investment. Equipping taxpayers to handle simple tasks in less time is a clear area of focus.
Will these things all happen? Only time can tell. I’m generally hesitate to be giddy about tax money being spent, as it seems we’re often underwhelmed by the results. This is certainly one to be hopeful about being that it touches every one of our lives.