A few days ago, the White House kicked off the fiscal year 2022 budget process. This constituted the sending of a letter to the House Appropriations Committee chairman and also issuing a press release on President Biden’s funding priorities.
The budget request includes 11 areas, which also gained attention during the presidential campaign. Education, medical research, housing, and civil rights are all part of this.
The Treasury Secretary Janet Yellen also elaborated a bit on the areas under her department. She said that the Biden plan will also seek money to help seek a more equitable tax system.
What this means is basically that the Internal Revenue Service will be empowered to do its job better — and this means that it will also be better equipped to audit people who are evading taxes or misreporting anything. Audits will naturally increase, too.
The upcoming budget will include $13.2 billion for the IRS overall, up from $1.2 billion or 10.4% as compared to the budget for 2021.
To boost tax compliance and thereby increase revenue, the 2022 discretionary request also provides an additional increase of $417 million in funding for tax enforcement.
The IRS will therefore increase oversight of high-income and corporate tax returns to ensure compliance, Yellen confirmed.
In total, the 2022 discretionary request will increase IRS resources for tax enforcement by $900 million. If the Biden request goes through, the historically underfunded IRS will ramp up its lacking enforcement and audit efforts.
What does that mean for you, as a taxpayer? The IRS can audit you too, and the chances of that happening will increase even more now. Do you know what to do in case you’re targeted by an IRS Audit? We help our clients in such a situation too.
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In addition to audits, however, the increase in budget will also help improve taxpayer service. Yellen said other requested FY22 funds should help the IRS provide new and improved online tools for taxpayers to contact the IRS easily and quickly, and enhance telephone and in-person taxpayer customer service, including outreach and assistance to underserved communities. This is welcome news, because contacting the IRS currently is a needlessly painful process.
We hope the IRS does end up getting a bigger budget so it can fulfil its duties in a better way.
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