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Reconciliation bill includes nearly $80 billion for IRS including enforcement, AUDITS: What that means for taxpayers

Article from CNBC.com

Senate Democrats on Sunday passed their climate, health and tax package, including nearly $80 billion in funding for the IRS.

Part of President Joe Biden’s agenda, the Inflation Reduction Act, allocates $79.6 billion to the agency over the next 10 years. More than half of the money is meant for enforcement, with the IRS aiming to collect more from corporate and high-net-worth tax dodgers.

The remainder of the funding is earmarked for operations, taxpayer services, technology, development of a direct free e-file system and more. Collectively, those improvements are projected to bring in $203.7 billion in revenue from 2022 to 2031, according to recent estimates from the Congressional Budget Office.

IRS audits have plunged over the past decade, with the biggest declines among the wealthy, according to a May 2022 report from the Government Accountability Office.

The audit rate for Americans making $5 million or more dropped to about 2% in 2019, compared to 16% in 2010, the report found. The agency said it is working to improve these numbers.

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Blog by Kim Storen, EA – Business Tax Manager

Learn more about Kim and the rest of the Storen Financial team here.