Erin Collins, the National Taxpayer Advocate, released her annual report to Congress last Wednesday. The highlights of the report include…
1 – Taxpayers and practitioners are supposedly receiving better service. Wait times to reach a customer service representative have been shortened along with the average time it takes to receive a refund.
2 – The report criticizes the long wait times for taxpayers to receive their legitimate Employee Retention Tax Credit Payments. There’s a current backlog of 1.2M claims. Most of these claims are taking well in excess of 1 to 2 years to process. The Service only expects to process 500K next year.
3 – The problem of Identity Theft Victim Assistance has worsened in the past year. It’s now taking 24 months to handle an individual claim. This is up from 19 months in 2023. These delays affected more than 500K taxpayers last year.
It should be noted that the increased funding afforded the IRS by the Inflation Reduction Act has been reversed. The IRS currently faces a $20B budget cut while the new administration has vowed to cut further.
As such, any improvements in IRS Service will probably be short lived.
Let me leave you with this…
Washington Legislators are gearing up for a long and protracted battle on the Hill over tax cuts. The biggest problem is that no one seems to have any idea how to proceed.
The Deficit
One problem seems to be how much to spend. Deficit concerns are running high in the House as many Republican Lawmakers are demanding that this budget is balanced. They say that any increases in spending would have the unexpected effect of raising inflation.
What To Cut
If they do pass some tax reductions, the question then becomes what do they cut to pay for the difference? The lobbyists have already revved up for a fight to preserve their individual pet projects. That potential list of cuts include…
1 – Tariffs
2 – Increasing the College Endowment Tax
3 – Cutting Green Energy Credits
4 – Cutting the IRS Annual Budget
5 – Reducing Overall Government Spending
Extending TCJA
The biggest tax cut on their agenda is an extension of the Tax Cuts and Jobs Act of 2017. But the question becomes how long?
Many would like to extend it indefinitely. Others prefer a shorter time frame. The problem is that extending all of the TCJA Provisions set to expire comes with a $400B price tag.
This is all happening while Congress’ dance card is full trying to deal with immigration reform, border security, and crime initiatives. The added problem with their being such a small Republican Majority means that even the most junior member of Congress can hold up any individual bill to demand specific nuggets for their constituents.
One thing is certain. The next few months should be quite entertaining.
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 Payroll Services, or Accounting and Tax Work, you have but to ask. I’m here and I remain,
Sincerely yours,
Chris Amundson
President
Accounting Solutions Ltd.
773-267-7500
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