When anyone hears the acronym ‘IRS’, which stands for Internal Revenue Service, they experience a quick bout of fear, followed by a moment of relief that they’re not on the audit list, followed by thoughts of wonder as to why the IRS even exists. This is completely normal behavior, and we’re here to support you!
Details of the new positions
As part of the recently passed Inflation Reduction Act, the IRS received funding for 87,000 new positions. This comes at a total cost of $80 billion, which the IRS claims it will recoup by finding tax-dodgers and recouping that lost hard-earned IRS loot. But don’t you fret, the IRS Commissioner has reassured everyone that the IRS will not use this new funding spigot to target low and middle-income Americans. Whew, that was close. Just to be even more clear, the IRS said that audits for individuals making less than $400k per year would actually decrease. Safe again!
These positions have repeatedly been called “agents” however, I cannot locate a specific breakdown of the billets by title. Of the $80 billion total, $45.6 billions is specifically called out for “enforcement-related purposes”. I’m not 100% sure what that means, but if you put the word law in front of it, you can be rest assured that these are IRS Agents who carry guns, badges and credentials. This wouldn’t be all that concerning, except the IRS recently purchased five million rounds of ammunition for unclear reasons. Obviously they have plans of taking up recreational target shooting.
Why the cause for concern
We all understand that the IRS is tasked with the enforcement of the U.S. tax code. Even though I think income taxes are unconstitutional, I understand the IRS mission and can see how the federal government benefits from chasing those pesky dollars that got away. Logically, you would think the IRS would be auditing corporations and wealthy individuals to ensure their efforts have the biggest monetary return. But there is no set rule for this.
The problem is the slippery slope, here. With inflation surging and U.S. spending and debt out of control, the general concept was to create a massive spending bill and deceitfully name it the ‘Inflation Reduction Act’, while simultaneously pouring money into the IRS to defend tax laws. That’s right, we think the $80 billion to the IRS can return $100 billion in lost tax revenue, so that’s a win for someone. It’s just not a win for you or me. Maybe, just maybe, we could have used that money to put armed officers in schools around the country. You know, something that could actually save lives.
Learn the tax code
This is the main point of the article. Without studying and understanding the tax code, you can’t possibly understand how anything tax-related impacts you. Sure, you could hire a CPA. But you know what they say – no one cares about your money as much as you do. If you really care about your money, you’ll become an expert on this sooner rather than later.
I touched on this topic in an article last year, but the lesson remains the same today. Study your tax return, learn the parts of the tax code that applies to all of your situations, and understand how EVERYTHING impacts your return. This is the best way to avoid paying excessive taxes and to keep more of your own money. Who doesn’t want to keep more of their hard-earned money?
