Big Audits
The IRS is one of the biggest and most infamous parts of the United States government. The IRS is the part of the federal government which is responsible for collecting taxes and administering the Internal Revenue Code. One major thing the IRS does is auditing, which is a financial review of an organizations or individual accounts, to ensure information is reported correctly according to the tax laws, and to verify the reported amount of tax is correct.
Recently, there has been a major push towards spending plans and a House vote for an allocation of $80 billion in IRS funding, with $45.6 billion for “enforcement”. This term of enforcement has had many people worried (especially middle-class individuals and small businesses), who believe they may see more audits. In response to this IRS Commissioner Charles Rettig has said that these resources are “absolutely not about increasing audit scrutiny on small businesses or middle-income Americans.” This increase in funding comes after a multi-year trend (lasting from 2015 to 2019) in which IRS audits plunged by 44%, according to a 2021 Treasury Inspector General for Tax Administration report. The new funding will help pay for the aimed hiring of roughly 87,000 new agents. These new workers will have a six-month training program and receive cases worth a few hundred thousand dollars.
What do you think about the IRS’s plans and do you think middle class Americans will be affected?
I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.
