After months of back and forth, it appears that additional funding is on its way to the Internal Revenue Service (IRS) with the Inflation Reduction Act of 2022 (Act). <\/p>\n\n\n\n
The Act would spend nearly $80 billion on the IRS and would give\nthe IRS authority to hire 87,000 additional IRS agents to ramp up audits on\nsmall businesses and taxpayers. The IRS would perform an additional 1.2 million\nannual audits under the plan and the increased spending on enforcement would net\n$124 billion.<\/p>\n\n\n\n
A summary of the Inflation Reduction Act of 2022 (Act) budgets\nfor new IRS Tax Enforcement revenue collections of $124 billion (based on the Congressional\nBudget Office Estimate). With respect to taxes, the summary states that the Act\nwill \u201c[m]ake the biggest corporations and ultra-wealthy pay their fair share\u201d\nand \u201c[t]here are no new taxes on families making $400,000 or less and no new\ntaxes on small business \u2013 we are closing tax loopholes and enforcing the tax\ncode.\u201d<\/p>\n\n\n\n
The Act, entitled \u201cEnhancement of Internal Revenue Service\nResources,\u201d provides the following new IRS funding:<\/p>\n\n\n\n
Taxpayer Services: $3,181,500,000<\/p>\n\n\n\n
Provide taxpayer services, including pre-filing assistance\nand education; filing and account services; taxpayer advocacy services; and\nother services relating to employment of experts and consultants.<\/p>\n\n\n\n
Enforcement: $45,637,400,000<\/p>\n\n\n\n
Conduct tax enforcement activities to determine and collect\nowed taxes; provide legal and litigation support; conduct criminal\ninvestigations; provide digital asset monitoring and compliance activities;\nenforce criminal statutes related to violations of internal revenue laws and\nother financial crimes; purchase and hire passenger motor vehicles; and provide\nother services.<\/p>\n\n\n\n
Operations Support: $25,326,400,000<\/p>\n\n\n\n
Support taxpayer services and enforcement programs,\nincluding rent payments; facilities services; printing; postage; physical\nsecurity; headquarters and other IRS-wide administrative activities; research\nand statistics of income; telecommunications; information technology\ndevelopment, enhancement, operations, maintenance and security; hire of\npassenger motor vehicles, operations of the IRS Oversight Board; and other\nservices.<\/p>\n\n\n\n
Business Systems Modernization: $4,750,700,000<\/p>\n\n\n\n
Improve the business systems modernization program,\nincluding development of callback technology and other technology to provide a\nmore personalized customer service experience but do not include the operation\nand maintenance of legacy systems.<\/p>\n\n\n\n
Report on IRS-Run Free \u201cDirect Efile\u201d Tax Return System:\n$15,000,000<\/p>\n\n\n\n
Deliver to US Congress (within nine months) a report on the\ncost of developing and running a free direct efile tax return system; taxpayer\nopinions, expectations and level of trust\u2014based on surveys\u2014for such a system;\nand opinions of an independent third party on the overall feasibility, approach,\nschedule, cost, organizational design and the IRS\u2019s capacity to deliver such a\nsystem<\/p>\n\n\n\n
Treasury Inspector General for Tax Administration (TIGTA):\n$403,000,000<\/p>\n\n\n\n
For necessary expenses of the TIGTA in carrying out the\nInspector General Act of 1978, including purchase and hire of passenger motor\nvehicles<\/p>\n\n\n\n
Office of Tax Policy: $104,533,803<\/p>\n\n\n\n
To carry out functions related to promulgating Treasury\nRegulations<\/p>\n\n\n\n
US Tax Court: $153,000,000<\/p>\n\n\n\n
For necessary expenses, including contract reporting and\nother services as authorized by 3109<\/p>\n\n\n\n
Treasury Departmental Office: $50,000,000<\/p>\n\n\n\n
For necessary expenses to provide oversight and\nimplementation support for IRS actions to implement the Act<\/p>\n\n\n\n
The IRS is also required (within six months after enactment)\nto provide Congress with a plan that details how the funds appropriated for\nTaxpayer Services, Enforcement, Operations Support and Business Systems\nModernization will be spent over the 10-year period ending with FY2031. The IRS\nmust provide quarterly updates to Congress regarding any updates to the plan,\nprogress made in implementing the plan and any changes in circumstances or\nchallenges in implementing the plan.<\/p>\n\n\n\n
Summary: It appears that the IRS is close to finally getting\nthe additional funding it has been seeking for years to increase customer\nservice enforcement efforts, update technology and explore ways to improve the\ntax return filing process. As tax professionals, we have seen an increase in audit\nactivity by the IRS in the last few years. With the IRS likely receiving much\nneeded additional resources, we expect this trend to continue into the near future.<\/p>\n","protected":false},"excerpt":{"rendered":"
After months of back and forth, it appears that additional funding is on its way to the Internal Revenue Service (IRS) with the Inflation Reduction Act of 2022 (Act). The Act would spend nearly $80 billion on the IRS and would give the IRS authority to hire 87,000 additional IRS agents to ramp up audits […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_daextam_enable_autolinks":"1","_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-4286","post","type-post","status-publish","format-standard","hentry","category-planning-for-tax-minimization"],"_links":{"self":[{"href":"https:\/\/patellawoffices.com\/blog\/wp-json\/wp\/v2\/posts\/4286","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/patellawoffices.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/patellawoffices.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/patellawoffices.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/patellawoffices.com\/blog\/wp-json\/wp\/v2\/comments?post=4286"}],"version-history":[{"count":1,"href":"https:\/\/patellawoffices.com\/blog\/wp-json\/wp\/v2\/posts\/4286\/revisions"}],"predecessor-version":[{"id":4290,"href":"https:\/\/patellawoffices.com\/blog\/wp-json\/wp\/v2\/posts\/4286\/revisions\/4290"}],"wp:attachment":[{"href":"https:\/\/patellawoffices.com\/blog\/wp-json\/wp\/v2\/media?parent=4286"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/patellawoffices.com\/blog\/wp-json\/wp\/v2\/categories?post=4286"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/patellawoffices.com\/blog\/wp-json\/wp\/v2\/tags?post=4286"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}