In the Black: January 2025
Dealing with the IRS
The story starts, perhaps unsurprisingly with money. You may have noticed, I know I have, that it’s been easier to reach the IRS in the last few years should you call them. That might be coming to an end. The outgoing administration approved $80 million in funding over the next decade for the IRS - to improve customer service, clear the pandemic backlog, and give the IRS the resources it needed to go after big tax cheats.
The customer service part is easy to understand, to answer the phone you need people. Even with all that additional money the IRS’s goal for the end of the decade still has them below staffing levels of the 1980’s and early 1990’s. Spoiler alert, the population is only bigger, hence the issues.
My hobby horse is what funding means about WHO is getting audited. Auditing working and middle-class folks is easier, especially if you have less staff. That’s why this additional funding was targeted to work on audits of taxpayers making over 400k and more complex businesses. The IRS has been outgunned by wealthy individuals and businesses for years. There was a nearly $700 billion gap between taxes owed and taxes paid during 2022, according to the IRS and their projections. The newly funded compliance efforts (i.e. audits) raked back $90 billion.
The incoming administration is looking to cut IRS funding, over objections from Democrats and some Republicans (who are supportive of the customer service improvements). I take exception to this, not only because I prefer to not spend my working days on hold with the IRS, but also because:
Cutting funding will only help the rich and corporations which will now be more likely to get away with tax fraud. AND it will increase audit rates (likely, based on past trends) for middle and working-class Americans, if only because they are easier to audit to maintain the set audit rates with less staff and resources.
If the US walks away from collecting tax revenue, while at the same time looking to cut taxes further for corporations (yup, Trump wants to lower big business taxes EVEN MORE) - how can we pay our bills? Do we just keep adding to the national debt? There are worries over paying for Medicare and so many other other important programs.
Maybe we could just start by collecting the taxes due? It seems pretty simple.
Tax Season is Nigh
If you have engaged for 2024 taxes you’ll be receiving your initial email and organizer soon. If you don’t receive it by 1/15 please check and ensure that you are fully engaged for the season (just email us!)
