We have discussed the impacts of the chronic underfunding of the IRS. While underfunding has reduced the prosecutorial impact of the IRS, it remained surprisingly agile and effective in pursuing high-asset tax crime and tax fraud. During this time, customer service declined precipitously, backlogs became deeper, and the agency has not been able to serve its purpose as the collection agency tasked with funding our form of government.
In August of 2022, the Inflation Reduction Act provided approximately $80 billion in funds to rejuvenate the agency over a ten-year period. At the time, Treasury Secretary Janet Yellen tasked the agency with preparing a strategic plan to govern the use of the funds. The Strategic Plan was delivered in April of this year.
Some objectives of the IRS plan include the following:
When the funding increase to the IRS was announced, backlash quickly followed. Rumors were quickly spread that the IRS planned to hire 87,000 armed agents to investigate middle-class taxpayers and small businesses.
Daniel Werfel, the current nominee to lead the IRS, stated in his confirmation hearing in February of this year that “the audit and compliance priorities will be focused on enhancing I.R.S. capabilities to ensure America’s highest earners comply with applicable tax laws.”
Fair taxation at all income levels is essential for good governance. That said, there are compliant strategies to grow and nurture high-wealth portfolios. If you have questions about your wealth plan or are concerned about a potential audit, speak with an experienced tax attorney about your concerns.
Serving local and international clients from offices in Chicago and Cleveland, the legal team at Robert J. Fedor, Esq., LLC provides strong representation for those with compliance questions, employment tax disputes or concerns about a tax fraud investigation. Call 800-579-0997 or contact us online today.