Ever since the U.S. government announced an increase in IRS funding. Many speculations have been making rounds regarding its effect on the tax system. The evident spike in the IRS funding has been a center of many speculations. They are looking to increase IRS funding by around $80 billion within the next ten years. This change has been a source of many gasps around the country.
The government with use this increase in IRS funding to help cover the tax gaps. Heavy investments in government programs will be responsible for this change. These programs will target the fraudulent behavior of the tax offenders. And compel them to pay their federal taxes on time.
Increased IRS Funding
The Warren office has released a statement saying “the IRS will strengthen, and they will eradicate tax gaps.” By enforcing the applicable tax code, modernizing the IT systems, and improving taxpaying services. Essentially, rebuilding and organizing the entire system of the IRS uses.
Now that we are facing the current global pandemic, in which the world has suffered greatly. The government has created many programs and relief campaigns to make sure they meet the average citizen’s basic necessities. As well as, to ensure the best possible treatment of Covid-positive patients. Therefore, the agency officials have decided to increase the budgeting limit to accommodate the needs and goals of the IRS.
The IRS Expects to Cater to More Audits
The agency officials, along with government officials, are ensuring a positive change in society by increasing the funding of the IRS. This increment will overhaul the IT industry so that data processing can be instant and quick. It will also increase the capabilities of the concerned authorities to keep a check on all the taxpayers. As well as, investigate those who have been stalling their tax returns. This increment will also establish minimum audit levels for highly paid corporations. Moreover, this increment in funding will bring about much-needed changes where the banks will have to disclose the means. And sources of different transactions and/or deposits.
This change will also ensure that there are smarter ways to deal with audits. Especially, where the government is fully informed of the nature of the audits carried out. Many individuals and organizations claim to own much less than they actually owe. Due to this, the country’s economy is suffering drastically. Therefore, it is likely that the IRS will take on more audits than it ever did. Thus, ensuring that the process will be transparent and thorough.
What You Need to Do to Ensure Your Safety
Many organizations with malicious content and a sense of forgery are misleading the IRS regarding their taxes. On the other hand, there have been many individuals and organizations that are providing the wrong information without even meaning to.
Either way, the information provided to IRS has been highly flawed. Which is in turn affecting the country. But, now with the increase in resources given to IRS by the government. They expect the screening process to be tougher than ever. Which every individual and organization has to go through. There will be better means of scrutiny, organization, conducting business, and technological savvy. This will ensure there are no errors in the process. Therefore, it is now important more than ever to comply with the tax codes in all your dealings. If you might have made a mistake, it is not the end of the world. You can notify the IRS before an audit and discuss the necessary measures needed to rectify the situation. On the contrary, if you process without notifying the concerned authorities, the consequences might be costly, not to mention grave.
So, keep a record of all your dealings carried out in the past. Also, make sure that all your future dealings comply with the tax code. However, it is not as easy it sounds. No matter what you do, there might be inevitable discrepancies. Why? Because of poor management and ineffective strategies. Therefore, it is essential to consult a tax professional. They will ensure that the process is sound and free of silly errors.
One more factor to be mindful of is being well-versed with the tax code in the light of Covid-19 changes. Because legislature changes are ever-present and ever-changing. You need to be up-to-date with the new changes announced by government officials. It might be too much to deal with. Thus, consulting a tax professional is the way to go.
However, make sure that you bagged the right person to handle your tax returns. This is because they will not be responsible for any error or discrepancy found in your case. The sole person who is responsible for the tax return is you. So, if you end up making some sort of silly mistake. It will be you who will have to face the dire consequences.
The increase in IRS funding will definitely bring about a drastic change in the tax system. Wealthy bodies will be accountable for their annual incomes. Including, what they are actually owed compared to what they let on. This change means more audits and a better screening system to ensure a better tax system.