Record IRS revenue—but Biden expands IRS scope/audits

People don't vote blue because they want to lie on their taxes and get away with it?

 

Anyone making less than 400k will not be effected......so nothing for most of you to worry about.

DD

 

Tax cheat is a significant problem. $7T in lost tax revenue over the next decade. Most of it from higher earners.

The Case for a Robust Attack on the Tax Gap | U.S. Department of the Treasury

A well-functioning tax system requires that everyone pays the taxes they owe. Today, the “tax gap”—the difference between taxes that are owed and collected—totals around $600 billion annually and will mean approximately $7 trillion of lost tax revenue over the next decade. The sheer magnitude of lost revenue is striking: it is equal to 3 percent of GDP, or all the income taxes paid by the lowest earning 90 percent of taxpayers.

The tax gap can be a major source of inequity. Today’s tax code contains two sets of rules: one for regular wage and salary workers who report virtually all the income they earn; and another for wealthy taxpayers, who are often able to avoid a large share of the taxes they owe. As Table 1 demonstrates, estimates from academic researchers suggest that more than $160 billion lost annually is from taxes that top 1 percent choose not to pay.1

Currently, an under-staffed IRS, with outdated technology, is unable to collect 15 percent of taxes that are owed, and a lack of resources means that audit rates have fallen across the board, but they’ve decreased more in the last decade for high earners than for Earned Income Tax Credit (EITC) recipients. For the IRS to appropriately enforce the tax laws against high earners and large corporations, it needs funding to hire and train revenue agents who can decipher their thousands of pages of sophisticated tax filings. It also needs access to information about opaque income streams—like proprietorship and partnership income—that accrue disproportionately to high-earners.

The Administration’s proposals call for significantly increasing the IRS budget, specifically $80 billion of investment over the coming ten years in enforcement, IT, and taxpayer services generating an estimated $320 billion in additional tax collections over the next ten years.

To further ensure that everyone pays their fair share, the Administration also calls for using information that financial institutions already possess—without imposing any burden on taxpayers whatsoever—so the IRS can deploy these additional resources to audit more sophisticated tax evaders. These changes to the third-party information reports are estimated to generate $460 billion over a decade.

In the subsequent decade, once the overhaul of the IRS is complete, these proposals combined will generate even more revenue: an estimated $1.6 trillion in additional tax revenue, just from improved collection of the taxes that are already due.

This revenue will be collected in a highly progressive way, as the tax gap is more concentrated toward the top of the income distribution.

Why does misreporting rise with income? In part, tax evasion is concentrated toward the top of the income distribution because higher-income taxpayers have the ability to tap into the services of accountants and tax preparers who help shield them from bearing their true income tax liability. Because these individuals know enforcement authorities lack the resources needed to pursue them, the consequences of their underpayments are viewed as minor, and so voluntary compliance rates tend to be lower.

But the distribution of the underreporting tax gap is also the natural byproduct of the current information reporting regime. There is a direct relationship between the information the IRS has at its disposal to verify that a taxpayer has properly paid her tax liabilities, and her voluntary compliance rate. For ordinary wage and salary income, compliance with income tax liabilities is nearly perfect (1 percent noncompliance rate). In stark contrast, for opaque income sources that accrue disproportionately to higher earners—like partnership income, proprietorship income, and rental income—noncompliance can reach 55 percent.

...

The Administration has been clear that audit rates will not rise relative to recent years for those with under $400,000 in actual income. Instead, these proposals are about targeting enforcement actions where they belong: on higher earners who do not fully report their tax liabilities.

Overall, the Administration’s compliance initiatives are guided by a singular objective—bringing about an end to a two-tiered tax system, where ordinary Americans comply with their tax obligations, but many high-end taxpayers do not. Giving the IRS the information and resources that it needs will generate substantial revenue. But even more importantly, these reforms will create a more equitable, efficient tax system.

 

In before a bunch of dumb ass libs defend paying more taxes....

 

Why would you be paying more taxes? Unless you cheat on your taxes this will have no effect on you.

 

Sounds like someone got hit with a CP2000

 

it is additional funding for the IRS to hire more auditors to go after tax cheats, such as the Trump Co.,
according to the Congressional Budget Office, the additional funding is projected to
bring in $203.7 billion in revenue from 2022 to 2031,

according to a Treasury official“The resources to modernize the IRS will be used to improve taxpayer services — from answering the phones to improving IT systems — and
to crack down on high-income and corporate tax evaders who cost the American people hundreds of billions of dollars each year,” according to a Treasury official.​

again, it is to go after tax cheats like the Trump co.

 

In before (I mean after) a bunch of dumb ass conservatives pretend this is about paying more taxes.

 

Exactly it is about Tax cheats.

DD

 

and considering income taxes are super simple and easy to do for everyone "cheating" is always malicious.

You guys really sound like people saying fourth amendment searches are only a problem if you are guilty of something.

 

We all know Donny cheated bigly on his taxes since the risk reward for lying is yuge.

Even if upper income folks dodge taxes a 10k penalty is miniscule compared to prosecuting wealthy dodgers who use tax shelters and hire illegals to obfuscate real returns.

Some cons don't make that much to matter. Hate to break it to y'all.

 

That is nothing like paying your taxes and you know it. My taxes go towards services that we all use. If there’s no probable cause there’s no reason for someone to search my house.

 

Anyways with the new tax laws you can’t deduct **** unless you’re a business owner or making damn good money and can afford to have a CPA do your taxes. Before the new rules I would write off all my milage and expenses for thousands in credits but now it’s better to just take the standard deduction.

 

I always thought they were thorough at checking. I remember having to pay $200 after the fact because they deemed my continuing education class not worthy of a tax credit about 5 years after I claimed it.

They did not have to break out the weapons in order to get me to pay.

 

Because it was $200. Same thing happened to my wife with a college fund her mom put in her name.

It’s the people not paying millions that should be worried.

 

The staff of the IRS is smaller than it has been for a long time and has needed to be increased.

It isn’t going to have any impact to the vast majority of people, it is going to be focused on high end earners.

 

Its not about cheating, audits are scary, some of us are self employed. Now I have to be more careful with all my transactions, from real estate to the contracting of work. Selling and buying all together. There are tons of guys I use to install carpet to granite tops, not all of them are companies that can provide receipts for their work. Most either want cash or Zelle... I have to report it as an expense on said business but sometimes receipts aren't always there. I'm sure big time companies and contractors have accountants and keep really good records of everything. If there was an audit I'm pretty sure I'd be fine but this whole ordeal just seems off. I don't like it...

 

Demand receipts. When I remodeled my old house I paid cash and they just used a carbon copy paper from Office Depot. You could buy your own and have them endorse it. You can get receipts via Zelle if you try. My father has a renter that pays that way and he was able to declare it.

 

@Salvy i just opened my Amegy app and found Zelle transaction history in 10 seconds. If you couldn’t figure that out maybe we shouldn’t take your opinions seriously.