In the month of August, President Joe Biden signed a new law, which is ‘The Inflation Reduction Act’. The particular law empowers the Internal Revenue Service (IRS) with $80 billion.
IRS Goes on a Hiring Spree
The new bill signed by President Joe Biden has empowered the IRS with new funds that amount to almost $80 billion.
IRS is considered the most powerful tax collection agency in the entire world and with the new bill, it has grown even stronger.
With the new allocation of funds, the IRS is set to go on a hiring spree, which is to help the tax collector enforce stronger regulations on the users.
The IRS will be able to implement stronger and stricter enforcement in the tax collection efforts.
IRS will Grow Brutal
With the new funds and newly hired/trained tax collection agents, the IRS will become fierce and stronger against the tax evaders.
With more resources and agents, the IRS will be able to investigate each tax evasion case in more detail. They will be able to increase their investigation network and get to the bottom of matters much faster than before.
The IRS will be able to carry out widespread and brutal audits in order to find the ones responsible who have been involved in evading taxes.
Suggestions by the Administration
When signing the bill into law, the administration had suggested that people making less than $400k annually would have no new audits conducted on their profiles.
However, the proposal was rejected by the Senate Democrats as they voted against the amendment.
Every Taxpayer is Responsible
As the proposal has been rejected, it means that the IRS will continue carrying out audits against any taxpayer, regardless of their annual income.
Therefore, every taxpayer needs to be extra careful and get ready as the IRS agents may soon be knocking on their doors.
Cryptocurrency Users must Remain Cautious
As the IRS will expedite its auditing process, it will also bring cryptocurrency users into its circle.
Therefore, any user who interacted with cryptocurrencies even once in the United States, they are answerable to the IRS. The interaction with cryptocurrencies could be in the form of buying, selling, exchanging, or using other ways of engaging with digital assets.
The IRS has already advised that the people filing the 1040-NR or the 1040-SR form must ensure they check the “no” or “yes” option when questioning about virtual currencies.
The IRS has announced that the option has to be checked by all who are filing the form, and not just the ones who are interacting with cryptocurrencies.
The IRS has announced that with the new funds they have received, they plan on hiring 87,000 new tax agents.