Let’s not be political here!

Greetings,

8/11 Weekly Newsletter – Let’s not be political here! “Just the facts, Ma’am.”

Many editorials have been written since the Schumer- Manchin pact passed in the Senate. And numerous headlines read, “The IRS Is About To Go into Beast Mode.”

WSJ stated, “The pact between Sen. Joe Manchin and Majority Leader Chuck Schumer includes $80 billion in new funding for the tax man. Democrats claim this “investment” will yield more than $200 billion in revenue. That estimate is highly speculative, but if it’s anywhere close to right, IRS auditors will soon be coming after tens of millions of Americans.”

Charles P. Rettig, the Internal Revenue Service Commissioner, told Congress that the tax collection agency would not increase audits of households earning less than $400,000 if it was given the additional $80 billion that lawmakers were considering in a proposed climate and tax legislation package. (text from WSJ)

The fact remains that 87,000 new IRS agents will be added to the agency’s payroll, and enforcement will be beefed up.

In 2021, the IRS collected $60 billion through enforcement. With the largest increase the agency ever received, the gloves will come off, and taxpayers will see significant efforts go into collections.

What does this mean for you if you have an IRS tax liability?

First, the IRS, the world’s largest collection agency, will get larger under this bill. The IRS, much to the myth, will not go away. Yes, they have “only” 10 years to collect on any outstanding debt. However, they will place liens (if the total debt is over $10,000) and, depending on the amount and age of the debt, will levy wages, bank accounts, pensions, and even your social security benefits.

As Commissioner Rettig stated above, the added enforcement will “only” affect those with income of over $400,000 or more. However, time will tell if that number drops.

As an Enrolled Agent and Certified Tax Resolution Specialist, I have been trained in how to deal with the IRS examination (audits) and collection units. Can you do this alone, sure, but should you?

Remember, this bill passed in the Senate. It has two more rounds. First, the House weighs in, and then the President must sign off on it. Then, if the House wants to make changes, the process starts over again. I do not have a crystal ball on such things, but I will keep an eye on its progress. I will update you when that happens.

Jeffrey Schneider, EA, CTRS, ACT-E
The Supreme Overlord of the Tax Code

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