top of page

Prepare for More IRS Audits!

The IRS is significantly enhancing its audit capabilities thanks to an infusion of $60 billion over the next ten years. This funding, although less than the initially proposed $80 billion from the Inflation Reduction Act of 2022, will enable the IRS to hire more experienced personnel and increase audit activity across the board.



The IRS's new financial resources allow it to hire mid-career professionals who can begin working effectively immediately, a shift from the previous practice of hiring and extensively training new graduates. This approach will help the IRS ramp up its audit activities much more aggressively in a shorter amount of time. 


The IRS has already increased its revenue agents by about 9% from the previous year, and audit activities are expected to rise, especially among high-income individuals, partnerships, and corporations. The IRS will now have sufficient resources to pursue multiple priorities simultaneously without having to choose between one or the other.


Commissioner Danny Werfel noted in March that the IRS has concentrated enforcement efforts on high-income individuals, issuing notices to 125,000 people who failed to file federal income tax returns since 2017, including 25,000 with incomes over $1 million. The IRS has also been auditing corporate jet usage and has collected $520 million from taxpayers since mid-2023.

The IRS will focus on several key areas during audits, including research and development credits, partner capital accounts, energy credits, and digital assets.


The agency plans to use new technology in their audit process, aiming to increase their effectiveness by selecting cases that are more likely to lead to a collection. Overall, the IRS's increased funding and new hiring strategy represent a significant transformation in its operations, promising more comprehensive and effective audits in the coming years.


TRANSLATION: MAKE SURE YOUR TAXES ARE IN ORDER!



This article is a general communication being provided for informational and educational purposes only and is not meant to be taken as tax advice, investment advice or a recommendation for any specific investment product or strategy. The information contained herein does not take your financial situation, investment objective or risk tolerance into consideration. Readers, including professionals, should under no circumstances rely upon this information as a substitute for their own research or for obtaining specific legal, accounting or tax advice from their own counsel. Any examples are hypothetical and for illustration purposes only. All investments involve risk and can lose value, the market value and income from investments may fluctuate in amounts greater than the market. All information discussed herein is current only as of the date of publication and is subject to change at any time without notice. Forecasts may not be realized due to a multitude of factors, including but not limited to, changes in economic conditions, corporate profitability, geopolitical conditions, inflation or US tax policy. This material has been obtained from sources believed to be reliable, but its accuracy, completeness and interpretation cannot be guaranteed.


LEGAL, INVESTMENT AND TAX NOTICE. This information is not intended to be and should not be treated as legal, investment, accounting or tax advice.


PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.

159 views0 comments

Σχόλια


bottom of page