Earlier this year, the new administration pushed the Inflation Reduction Act through both houses of Congress and signed it into law. Part of the plan was to increase IRS funding by $80B over the next ten years.
It was reported that this funding would provide the dollars necessary to hire 87K new agents. Half of those agents were supposed to be assigned to their enforcement division doing audits on upper income individuals and wealthier corporations.
That part of the law may be dead on arrival. The concept, although tricky, is that there’s a difference between passing a law and actually funding it.
They can pass a law that says they’re going to give any agency whatever. But when they actually sit down to do the budget for the following year, there’s nothing that says they have to follow through on any promise.
This is Washington we’re talking about. Their favorite dance is the old Potomac Shuffle.
Current polling numbers show that if the midterm elections were held today, both houses of Congress would go back to Republican control. If even just one of the houses flips, the Biden tax agenda may die a painful death.
Republicans have already said that their number one legislative priority in January would be to repeal the increased IRS funding. Whether this actually happens or not is probably a moot point.
Please understand that even if both houses are controlled by the Republicans after the midterms, they still won’t have enough votes to stop a presidential veto. If they do push through a repeal, it probably wouldn’t be signed into law.
But after all of that showboating was done, they would still be in charge of the budget process. Just because the IRS was promised the money doesn’t mean that they will actually get it.
Let me leave you with this.
The IRS has been saying that they’re having difficulties hiring agents for the new plan. Most of this has been blamed on a tight labor market.
Certainly a portion of that is probably true, but there may be other underlying factors which are hampering their efforts.
If you were looking for a job, wouldn’t you be looking for an employer who would be financially stable enough to employ you long-term? Given the budget difficulties that are eminent in this process, the funding for the new agents will probably end rather soon.
That would mean that the last hired would be the first fired. This possible outcome is probably stopping anyone with any financial sense at all, from filling out an application.
The other difficulty they must be having is what they’re paying. The average new hire is reportedly being paid $18.93 per hour.
I hate to tell you this, but you can’t buy much talent in this arena for that hourly wage. Twenty-five years ago, maybe, but not now.
There’s any number of reasons why the $80B in additional funding and 87K new hires may be doomed from the start.
We’re all going to get through this. Let’s get through it together.
Accounting Solutions Ltd. stands ready to complete our mission and purpose of protecting you, your family, and your business. Whether you need Employee Retention Credits, M&A Due Diligence, Payroll Services, or Accounting and Tax Work, you have but to ask. I’m here and I remain,
Accounting Solutions Ltd.
Note that the only professional services provided by Accounting Solutions Ltd. are those specified in a written communication from our office detailing the scope of services to be rendered and the terms and conditions applicable to the engagement.