The IRS Lately: the Good, the Bad, and the Ugly
The IRS has been getting a lot of attention lately, for a variety of reasons. Most of it has been highlighting some frustrations taxpayers have been experiencing along with being a piece of the pending legislative proposals.
Over the past 18 months, the pace of change has caused some major headaches for both taxpayers and tax professionals. From things like refunds being held for months, extremely long wait times, to millions of system generated tax notices. It’s been reported that less than 3% of calls to the IRS actually get through to an IRS agent.
The Wall Street Journal had an article a few weeks ago highlighting some of these issues, quoting CLA’s own Chastity Wilson. The article went on to highlight the huge increase in tax notices sent out to taxpayers, and how quick they are going to collections. A big part of the increase has been due to how taxpayers have claimed stimulus payments (Recovery Rebate Credits).
Included in the proposed budget reconciliation bill is $80 billion of funding for the IRS to staff up operations, which will help with tax enforcement (and hopefully to fix the issues noted above). The CBO estimated this could provide approximately $200 billion of revenues over a 10 year period.
The Wall Street Journal editorial board had an article earlier in the week about one of the other items included in the proposed budget reconciliation bill. The proposed bill has language that would require third parties, such as banks, to report account details and transaction history for accounts over $600, or that has individual transactions over $600, to the IRS. That certainly would result in a tremendous amount data being provided to the IRS when compared to what was historically provided. This would raise questions as to how the data will be used and the security of data provided.
Andy is a CPA and trusted advisor with 15 years of experience providing tax, accounting, assurance, and consulting services to transportation industry owners and operators. He is a tax principal with CLA in the Minneapolis, MN office. He also consults with high net worth individuals and owners of closely-held transportation businesses on all aspects of tax planning, estate planning, and retirement planning. Andy is also the tax leader for transportation industry across CLA.
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