IRS says 87,000 new agents will help raise $1 Trillion - per Bloomberg / DOGE to AUDIT the IRS!
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Biden’s $80 billion plan to beef up IRS audits may target wealthy small business owners
PUBLISHED WED, MAY 5 202110:56 AM EDTUPDATED THU, MAY 6 20214:19 PM EDT
President Joe Biden is asking for $80 billion to help the IRS crack down on tax avoidance from wealthy Americans and big corporations.
The proposal seeks a boost in enforcement staffing, technology and additional bank reporting, measures that may generate an estimated $700 billion in tax revenue over the next decade.
However, some financial experts say the plan may spark more audits for certain small businesses.
More from Personal Finance:
How Biden’s capital gains proposal may hit middle-class home seller
Biden’s inherited real estate tax may impact more people than just the wealthy
How Biden’s real estate tax plan may hit smaller property investors
IRS funding
Biden’s proposal comes as the IRS struggles with the volume and complexity of returns.
The agency lost more than 33,378 employees between 2010 and 2020, including those auditing returns and collecting unpaid taxes.
These cuts have resulted in fewer audits for high-earning filers. The IRS audited fewer than 2 out of every 100 taxpayers earning more than $1 million in 2020, a Syracuse University report found.
While the number of millionaires have nearly doubled since 2012, tax audits have dropped by 72%, to 11,331 in 2020, from 40,965 in 2012.
The funding dip has impacted more than just the wealthy, however.
A recent National Taxpayer Advocate report found the IRS answers only 24% of calls, making it difficult for those grappling with the slew of tax changes amid the pandemic.
Advocates say Biden’s proposal may help pay for his $1.8 trillion American Families Plan, while opponents argue it may place burdens on small businesses without guaranteeing the promised tax revenue.
“A robust and sustained investment in the IRS is necessary to ensure it can do its job of administering a fair and effective tax system,” said IRS Commissioner Chuck Rettig in an email.
He said the agency needs more resources for investigations into underreported income and to pursue high-income taxpayers who evade tax liability through “complex schemes.”
They also need improved technology for complex tax returns and tracking income.
“And, it requires access to better information so that the agency can target its efforts at the most egregious offenders while helping compliant taxpayers avoid unnecessary and costly audits,” he said.
The budget increase will also make it easier for the IRS to provide taxpayers with timely answers to questions, he said.
Impacted small businesses
The plan may result in more audits for some small businesses, particularly high earners, according to financial experts.
“If you’re an individual making over $400,000 a year, you should feel like you have a target on your back,” said Paul Axberg, a certified financial planner and CPA at Axberg Wealth Management in Sun City West, Arizona.
Cash-only businesses
Certain small businesses may face an audit under the plan.
“I think the industries that should be concerned are those in cash,” said Luis Strohmeier, a Miami-based CFP and partner at Octavia Wealth Advisors.
He expects the agency to scrutinize cash-only small businesses like restaurants, retail, salons and other service-based companies.
“I think going after mom and pops, where the agent goes to see them, and they have all their receipts in a shoebox, just might yield something,” said Strohmeier.
He said those with looser record-keeping should take the opportunity to clean up their books.
Passing a tax audit
Getting the call for an audit may be nerve-racking for small businesses. But those following the rules shouldn’t be afraid of run-ins with Uncle Sam, financial experts say.
“It’s always about having good record-keeping,” Axberg said.
He said it’s critical to save receipts for all expenses and keep books up-to-date. It will be easier for a CPA to back up your position with pristine records in the event of an audit.
While the less costly do-it-yourself approach may be tempting, Strohmeier urges against it.
“Make sure you get your books audited by your accounting firm and that everything matches up, just in case somebody knocks on your door,” he said.
Tax audits usually last for three years. But once the agency observes a small business with organized paperwork, matching and up-to-date records, they will typically leave you alone, Strohmeier said.
Still, the proposal isn’t final, and any affected businesses have time to prepare.
“I think they should just be aware that there’s gonna be a higher odds of getting an audit,” Axberg said.
PUBLISHED WED, MAY 5 202110:56 AM EDTUPDATED THU, MAY 6 20214:19 PM EDT
President Joe Biden is asking for $80 billion to help the IRS crack down on tax avoidance from wealthy Americans and big corporations.
The proposal seeks a boost in enforcement staffing, technology and additional bank reporting, measures that may generate an estimated $700 billion in tax revenue over the next decade.
However, some financial experts say the plan may spark more audits for certain small businesses.
More from Personal Finance:
How Biden’s capital gains proposal may hit middle-class home seller
Biden’s inherited real estate tax may impact more people than just the wealthy
How Biden’s real estate tax plan may hit smaller property investors
IRS funding
Biden’s proposal comes as the IRS struggles with the volume and complexity of returns.
The agency lost more than 33,378 employees between 2010 and 2020, including those auditing returns and collecting unpaid taxes.
These cuts have resulted in fewer audits for high-earning filers. The IRS audited fewer than 2 out of every 100 taxpayers earning more than $1 million in 2020, a Syracuse University report found.
While the number of millionaires have nearly doubled since 2012, tax audits have dropped by 72%, to 11,331 in 2020, from 40,965 in 2012.
The funding dip has impacted more than just the wealthy, however.
A recent National Taxpayer Advocate report found the IRS answers only 24% of calls, making it difficult for those grappling with the slew of tax changes amid the pandemic.
Advocates say Biden’s proposal may help pay for his $1.8 trillion American Families Plan, while opponents argue it may place burdens on small businesses without guaranteeing the promised tax revenue.
“A robust and sustained investment in the IRS is necessary to ensure it can do its job of administering a fair and effective tax system,” said IRS Commissioner Chuck Rettig in an email.
He said the agency needs more resources for investigations into underreported income and to pursue high-income taxpayers who evade tax liability through “complex schemes.”
They also need improved technology for complex tax returns and tracking income.
“And, it requires access to better information so that the agency can target its efforts at the most egregious offenders while helping compliant taxpayers avoid unnecessary and costly audits,” he said.
The budget increase will also make it easier for the IRS to provide taxpayers with timely answers to questions, he said.
Impacted small businesses
The plan may result in more audits for some small businesses, particularly high earners, according to financial experts.
“If you’re an individual making over $400,000 a year, you should feel like you have a target on your back,” said Paul Axberg, a certified financial planner and CPA at Axberg Wealth Management in Sun City West, Arizona.
Cash-only businesses
Certain small businesses may face an audit under the plan.
“I think the industries that should be concerned are those in cash,” said Luis Strohmeier, a Miami-based CFP and partner at Octavia Wealth Advisors.
He expects the agency to scrutinize cash-only small businesses like restaurants, retail, salons and other service-based companies.
“I think going after mom and pops, where the agent goes to see them, and they have all their receipts in a shoebox, just might yield something,” said Strohmeier.
He said those with looser record-keeping should take the opportunity to clean up their books.
Passing a tax audit
Getting the call for an audit may be nerve-racking for small businesses. But those following the rules shouldn’t be afraid of run-ins with Uncle Sam, financial experts say.
“It’s always about having good record-keeping,” Axberg said.
He said it’s critical to save receipts for all expenses and keep books up-to-date. It will be easier for a CPA to back up your position with pristine records in the event of an audit.
While the less costly do-it-yourself approach may be tempting, Strohmeier urges against it.
“Make sure you get your books audited by your accounting firm and that everything matches up, just in case somebody knocks on your door,” he said.
Tax audits usually last for three years. But once the agency observes a small business with organized paperwork, matching and up-to-date records, they will typically leave you alone, Strohmeier said.
Still, the proposal isn’t final, and any affected businesses have time to prepare.
“I think they should just be aware that there’s gonna be a higher odds of getting an audit,” Axberg said.
Yayy more tax dollars for Ukraine and a bunch of other shit that won't benefit Black people!
The irony of this all is the main posters on BGOL talking “people that don’t vote are idiots” are the people that supported giving money to the government and the IRS because this is what they all voted for.Yayy more tax dollars for Ukraine and a bunch of other shit that won't benefit Black people!
Who in their right mind would be in favor of giving away more of their hard earned money without seeing any return on investment? Well, nevermind, the same people that will give away their vote without seeing any benefit to their family and community.
Well.....
They quickly hammer the small hard working man but allow Trumps to mock and skirt the laws at will. Fuck em!
Anyone who's mad at this, I have two questions; Do you pay any Taxes? Based on what is listed, will they come after you?
No need to divert from the topic of this thread. If you want to converse on another topic, you can make a thread or @ me in another.
The IRS doesn’t need a reason to come after anyone. They can randomly select people to audit.
This is going to take more money from the poor and middle class and eventually usher in a communist economic system because most people won’t be able to afford anything.
I did. I'm sure you saw it
Got my bill down to $6k last year. I want that shit under 5k this year. I have a feeling it ain’t the millionaires who gone be feeling this move, but people like myself. I got two W-2 jobs got and a business. I need all my bread bruh, I work hard for this shit more than most people.
Sidenote: I just realized how Jamaican I am.
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Side note: I have yet to hear a politician push a bill that exempt an honorable retired military member from paying federal taxes, instead, it’s “thank you for your service” bullshit!
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A big part of that trillion will come from crypto tax enforcement and going after the multimillionaires from crypto they just gave them time to settle in with their assets since most or too stupid not to leave the usa or renounce their citizenship. A SHIT STORM IS COMING
They were doing that decades before AI.
The been hunting for their cut of crypto for a long time, These fly by night coins and scam coins have helped them speed up the process but not to go after multi millionaires' who already got loopholes in place but the smaller guys who have jumped in and are confused by the tax laws that come with it when cashing out.
the 2021 bull run was legendary a lot of common people made out like bandits with no crypto law in place I just hope they left the country and moved their money
They shake us down..get the money.
Then conveniently lose it...and no heads roll.
We are sooo dumbed down as a nation...
See govt loses trillions of tax payer dollars.
We shouldn't pay another tax until all our trillions
Are found!!
Then conveniently lose it...and no heads roll.
We are sooo dumbed down as a nation...
See govt loses trillions of tax payer dollars.
We shouldn't pay another tax until all our trillions
Are found!!
