Jeremiah K Murphy, CPA Inc

The 2022 Inflation Reduction Act, also known as IRA, has some interesting provisions in it that provide our Internal Revenue Service with additional funding over the next ten years of about $80 Billion Dollars.  The Act also details how the IRS should spend their increased budget.  Here are the increases suggested in the 2022 IRA:

Enforcement: an additional $45.6 Billion

Operations support: $25.3 Billion in additional funding

Business System Modernization: $4.8 Billion

Taxpayer Services: $3.2 Billion more

TOTAL ADDITIONAL IRS FUNDING over the next ten years is $78.9 Billion.

Notice that the enforcement budget will increase $45.6 Billion.  This means the IRS can hire additional agents to go after tax-cheats.  The aim of Congress is clear, they are taking a stab at closing the gap between the taxes paid and the taxes that the government is rightly owed.  I think we all believe that people should pay their fair share of the tax burden.  But now look at the additional funds that are budgeted for Taxpayer Services ($3.2 Billion).  Taxpayer services are the IRS answering their telephone when you call them with a question.  Taxpayer Services include processing your income tax return in a reasonable amount of time, and not being millions of returns behind almost throughout the year.

The amount of additional budget for taxpayer services is only 7% of the amount that is budgeted for enforcement!  Yet, it seems reasonable to me, that, if IRS audits and collection activity go up, taxpayers will need more in services from the IRS, which they are not getting even now!

Keep an eye and ear out for the IRS funding decisions and we can all hope that they direct more new money to taxpayer services out of the almost $80 Billion in additional funding.

Have you had a bad experience with the IRS?  Write us with a short description of what happened and when it happened.

As always, if you have questions or just want to vent about the IRS, give us a call.