IRS says number of audits about to surge.
May 3, 2024 2:58:43 GMT
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Post by thekindercarebear on May 3, 2024 2:58:43 GMT
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The IRS says it is about to ramp up audits as it cracks down on tax cheats and seeks to deliver more revenue into the U.S. Treasury's coffers. But not every group of taxpayers will face more scrutiny, according to IRS commissioner Danny Werfel.
The IRS has been bolstered by $80 billion in new funding directed by the Inflation Reduction Act (IRA), which was signed into law in 2022 by President Joe Biden. The idea behind the new funding was to help revive an agency whose ranks have been depleted over the years, leading to customer service snarls, processing delays and a falloff in audit rates.
The IRS plans to triple the audit rates on large corporations with assets of more than $250 million. Audit rates for these companies will rise to 22.6% in tax year 2026 from 8.8% in 2019.Large partnerships with assets of more than $10 million will see their audit rates increase 10-fold, rising to 1% in tax year 2026 from 0.1% in 2019.Wealthy individuals with total positive income of more than $10 million will see their audit rates rise 50% to 16.5% from 11% in 2019.
"There is no new wave of audits coming from middle- and low-income [individuals], coming from mom and pops. That's not in our plans," Werfel said.
But by focusing on big corporations, complicated partnerships and wealthy people who earn over $10 million year, the IRS wants to send a signal, he noted.
The IRS says it is about to ramp up audits as it cracks down on tax cheats and seeks to deliver more revenue into the U.S. Treasury's coffers. But not every group of taxpayers will face more scrutiny, according to IRS commissioner Danny Werfel.
The IRS has been bolstered by $80 billion in new funding directed by the Inflation Reduction Act (IRA), which was signed into law in 2022 by President Joe Biden. The idea behind the new funding was to help revive an agency whose ranks have been depleted over the years, leading to customer service snarls, processing delays and a falloff in audit rates.
The IRS plans to triple the audit rates on large corporations with assets of more than $250 million. Audit rates for these companies will rise to 22.6% in tax year 2026 from 8.8% in 2019.Large partnerships with assets of more than $10 million will see their audit rates increase 10-fold, rising to 1% in tax year 2026 from 0.1% in 2019.Wealthy individuals with total positive income of more than $10 million will see their audit rates rise 50% to 16.5% from 11% in 2019.
"There is no new wave of audits coming from middle- and low-income [individuals], coming from mom and pops. That's not in our plans," Werfel said.
But by focusing on big corporations, complicated partnerships and wealthy people who earn over $10 million year, the IRS wants to send a signal, he noted.
