The continuing resolution that the Senate approved last week that was signed into law on Saturday included the extension of a $20.2 billion rescission to the IRS budget. This, once again, removed part of the $80 billion that the IRS was supposed to receive over 10 years from the Inflation Reduction Act of 2022.
The following has occurred to the agency since the beginning of this year…
1 – The Service is planning on pausing its technology modernization efforts.
2 – 6,700 probationary employees at the IRS have been laid off.
3 – 4,700 IRS workers accepted the voluntary buyout offer from the Office of Personnel Management’s “deferred resignation program.” The IRS employees who accepted the buyout offer have been told to continue working until May 15th.
4 – IRS Commissioner Danny Werfel resigned his post shortly before President Trump’s inauguration.
5 – The new acting commissioner, Doug O’Donnell, then abruptly retired.
6 – The existing leadership at the IRS has reportedly been making plans for further staff reductions between another 20% to 50%.
7 – 430 out of about 1,900 employees at the Taxpayer Advocates Office are slated to be cut, with 90 employees already accepting the voluntary buyout offer.
If I didn’t know any better, I’d think this was the plot of a Soap Opera.
Let me leave you with this…
If you’d asked me 100 short days ago whether or not this was possible, I would have laughed in your face. But here we are.
Sometimes fact is stranger than fiction. I’m going to make two statements, and then let you surmise the rest.
IRS Processing Times For Anything Just Went To Infinity
The majority of the people who took the early buy-out were the most experienced agents at The Service. They were the ones who were ready to retire.
This means that there will be a lot more problems than usual. The people handling the new cases just won’t know what they’re doing.
And how will we get those problems resolved? By going to those same people who couldn’t discern the difference between a tax law and two-by-four.
You’re going to need to be patient. Very patient.
Please don’t make the mistake of going into a tax problem thinking that the person handling it either knows the law or the proper way to administer it. They probably won’t.
We may need to go back and forth several times to get a fair resolution to anything from a simple letter to a more complicated issue.
If You’re Being Audited, There’s A Reason
In order to explain this, let’s use an example. You have a small amount of money to invest, let’s say $100K.
You’ve done your due diligence, ran the numbers looking at 50 stocks, but you only have enough money to make 4 investments. How will you choose where to put your money?
You’ll choose the four investments that will provide the greatest return. The managers at the IRS will do exactly the same thing.
Their resources are being cut to the bone. If you’re going to be audited, it will be because they’re expecting a bonanza in additional money collected. They’ll put their limited resources where they expect the biggest bang for their buck.
Obviously, by doing what we do as well as we do it, the chance of one of our clients being audited just went down exponentially. But that’s only because we take the time, know the law, and do it right.
But if you aren’t one of our clients and you do get an audit letter, be afraid. They’ll have a very good reason for coming after you.
Don’t let your accountant tell you that it’s a random audit. They haven’t had the resources to do those for several years, and certainly don’t now.
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
888-310-0300
www.SalarySolutions.net
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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.