Should taxpayers anticipate increased scrutiny from the Internal Revenue Service (IRS), whose $80 billion in new resources will help hire more auditors to catch tax cheats?
Wealth experts claim that the dearth of qualified accountants caused by the impending retirement tsunami of IRS personnel may help calm the anxiety of wealthy investors.
Will Tax Payers Benefit From IRS Additional Funding?
The IRS will get an additional $46 billion over the course of the next ten years, almost all of which will go toward enforcement or the examination and audit of returns in an effort to recover unpaid taxes. This goal depends in part on employing and preparing revenue agents to examine tax returns submitted by businesses, partnerships, and individuals.
Treasury Secretary Janet Yellen has asked the IRS to submit a strategy within six months for the agency’s almost $80 billion in financing in light of President Joe Biden’s comprehensive tax, health, and environment package recently being signed into law.
According to the document acquired by CNBC, Yellen said that the additional funding will improve the IRS in enforcing tax regulations for high-net-worth individuals, large firms, and complex partnerships who presently pay substantially less than they owe.
As part of Biden’s objective following years of budget cuts, the Inflation Reduction Act, which was passed on Tuesday, allots $79.6 billion to the IRS over the following ten years.
IRS $80 Billion Funding Goals
The email also outlines four priorities for the approximately $80 billion in the financing, calling it a monumental opportunity to change the IRS.
Clear IRS backlog
The memo stated that Yellen wants to completely resolve the backlog at the agency, which currently numbers millions of unprocessed tax returns. There were 9.7 million unprocessed individual 2021 tax returns as of August 5, according to the IRS, despite Rettig’s vow in March to eliminate the backlog by the end of 2022.
Improve customer service
Furthermore, Yellen pressed for substantial changes in the taxpayer service. The Taxpayer Advocate noted that although the IRS only answered 11% of phone calls during fiscal 2021, substantial advancements had been made because of technology.
Overhaul the IRS’ technology systems
The memo notes that the agency’s technological systems need to be overhauled since they are decades out of date.
The two IRS systems that house the official records of individual and company taxpayer accounts are the federal government’s two oldest major technical systems, according to the National Taxpayer Advocate Erin Collins’ report to Congress in January.
Increase IRS employees
Yellen has made hiring IRS employees a priority in an effort to replace the 50,000 IRS employees who are anticipated to retire over the next five years. The number of full-time employees at the IRS in fiscal 2021 was 78,661, down 12.9% from 2012, the agency reported.