Episode 120

The IRS is Hiring 87,000 New Agents; Should You Be Worried About an Audit?

 

The Inflation Reduction Act was recently signed into law and allocated $79 billion dollars for the IRS. The IRS is said to hire 87,000 full-time employees, which has caused concern from some regarding the likelihood of IRS audits increasing. Tune in to learn why the IRS needs this kind of funding, and the things the new budget will be allocated towards.

What You Need to Know

If you have watched the news lately or scrolled through your social media headlines, then you know the IRS is hiring 87,000 new full-time employees. The IRS has been severely understaffed and under budget up until recently when the Inflation Reduction Act was signed in to law. This allowed the IRS to receive the funding and staff they need to process taxes and refunds among other things.

Should I Be Worried?

Fear not, this was not designed to make audits higher or for the IRS to go after the average worker. The IRS commissioner, Charles P. Rettig, has stated they are expecting for audit rates to stay the same or even get lower. People earning under $400,000 annually probably won’t see any change at all. If anything, you will see improvements in the processing of returns, customer service, answering phone calls and overall better correspondence with the IRS.

Key Takeaways:

-The IRS received nearly 80 billion in funding through the Inflation Reduction Act.

-Audit rates are expected to stay the same or get lower.

-Hiring new agents and staff means better customer service, less wait time on the phone and faster processing times.

Notes:

In this episode, Luis speaks about the following and more:

·      IRS budget and employees for the past 10 years

·      IRS delays in processing tax returns

·      IRS delays in answering calls

·      Who is more likely to get audited in the future

Sources:

https://money.com/irs-funding-higher-taxes-more-audits/

https://www.irs.gov/newsroom/irs-statement-by-irs-commissioner-chuck-rettig-on-the-inflation-reduction-act

https://www.taxpayeradvocate.irs.gov/reports/2021-annual-report-to-congress/most-serious-problems/

Resources:

·      Download the 3 Fundamental “Money Moves” to Make Before Turning 45

·      LatinXcellence, more than a brand, it’s a movement!

·       Luis’ LinkedIn

·       Luis’ Twitter

·       Luis’ IG On My Way To Wealth YouTube channel