A recently released report from the Treasury Inspector General for Tax Administration (TIGTA) showed that the IRS collected $4.9T in revenues during fiscal year 2022 which ended last September. This was a $790B increase from 2021.
Individual taxpayers filed 161M returns while businesses filed 12M. Over 31M payroll tax returns were filed and another 297M estate and gift tax returns were sent in.
Income taxes paid by individuals has increased by over $1T since 2019. That’s a staggering figure when you realize that this was the last full year of collections we’ve had since the beginning of the pandemic.
Enforcement revenue for the period was $72B. The most frightening number in the report was that revenue from field compliance, AKA Auditing and Strong Arm Collections, was up 37% from last year.
The IRS has already stated that the reason for the increase was the additional $80B in funding they received from the Inflation Reduction Act. This is obvious BS.
If your enforcement revenue is $72B and revenue from collections only increased 37%, then how can anyone possibly use that argument to talk about an additional $790B in revenues? The math just doesn’t work.
Let me leave you with this…
I’m sharing this story with you for two reasons.
Overall Tax Policy Dictates Federal Revenues
The last time we had a balanced budget was at the beginning of President Clinton’s second term. He then had the audacity to get in front of the cameras and take full credit for it.
If you’ll remember, his first term had been marked with nothing but problems with Congress. Even though he enjoyed a Democratic Majority at the time, he passed absolutely no significant tax legislation.
So how did we end up with a balanced budget?
The concept I want you to understand is that it takes several years for tax policies to have their desired effect. President Bush The First passed a major tax bill that ultimately got him fired because he had promised, “No New Taxes.” It was those policies and additional controls on spending that balanced the budget back then.
Now we have all of these additional tax revenues. Why? Because the 2017 Tax Cuts and Jobs Act lowered taxes.
It just took time for the legislation to have its desired effect. Now if both sides of the aisle could ever get spending back into place, our economy could actually do some open field running.
IRS Enforcement Actions Have Significantly Risen
They’re coming. My Brothers and sisters, I’m telling you now that our friends at the taxation agencies are on a holy crusade.
This year’s increased revenues from collections proves the point succinctly. When all of this started with the Inflation Reduction Act, a blind man could have seen them coming from miles away.
And the only thing between them and your bank account is me.
It has never been more important for your books and tax returns to be pristine. If you give them even one little thing to chew on, they’ll be like a mad dog without a bone.
I haven’t had one of my returns audited at the Federal Level in 12 years. Given the fact that most of our clients are perfect audit targets, that’s really saying something.
If there’s no reason for them to knock on your door, they’ll go to your neighbors house instead. Please get your work into us today.
We’re all going to get through this. Let’s get through it together.
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