In an effort to shift its focus to high-income taxpayers and corporations that don’t pay their taxes, the IRS announced they are looking to hire accountants, lawyers, and other professionals in the industry. Additionally, the IRS released its annual data book last week. A statement was also released by the agency regarding how they plan to use the $80 billion in funding they are receiving.
IRS Statement
“The IRS will focus the Inflation Reduction Act enforcement resources on hiring the accountants, attorneys, engineers, economists, and data scientists needed to pursue high-income and high-wealth individuals, complex partnerships, and large corporations that are not paying the taxes they owe,” said the agency’s statement. “Given the increase in filing populations over time, the complex nature of the tax filings, and the IRS’s inability to keep pace due to lack of resources, it makes sense to focus initial Inflation Reduction Act implementation efforts exclusively on increasing our capacity to assess compliance of high-income and high-wealth individuals, complex partnerships, and large corporations. The IRS has no plans to increase the audit rate for households making less than $400,000.”
Audit Rates Down
Another reason the IRS is motivated to hire more tax professionals is that audit rates have been steadily declining since 2018, according to reports. Audit rates in every area have been declining. These areas include taxpayers making over $10 million, overall corporate audit rates, and partnership audit rates.
Wrap Up
The Internal Revenue Service has made it clear that its goal is to crack down on high-income taxpayers, complex partnerships, and other corporations that “don’t pay enough taxes,” according to the agency. The IRS has also said they do not plan to target anyone making less than $400,000. Lastly, we will have to wait and see how many people the agency brings in for the next filing season.