Last week, an announcement was made by the Internal Revenue Service about plans to fill over 3,700 jobs throughout the United States so as to expand fairness to the tax system. These positions will be available in more than 250 locations. A spokesperson for the IRS claims the new positions will help the agency enforce tax laws regarding wealthy corporations, partnerships, and individuals who have gotten away with cheating on their taxes. A tax lawyer in San Jose has learned that high-income earners may be particularly targeted by this new, unofficial “task force.”
Decades-Long Decline of Audits May Now Be Reversed
When the announcement was made last Friday, IRS Commissioner Danny Werfel stated that there has been at least a 10-year decline in the auditing of corporations, complex partnerships, and wealthy individuals. Werfel predicted that oversight will now be expanded with regard to these “areas of concern,” and that this is due to the 3,700 new positions the IRS has created.
Any San Jose tax attorney would likely agree that additional people working in this capacity will necessarily lead to a higher number of audits. Because audits are the primary avenue through which the IRS catches those who cheat on their taxes, it is believed that this approach will lead to its ultimate success in catching dishonest taxpayers.
Additional Jobs Planned Through 2025
This next wave of hiring is one component of a broader hiring spree currently taking place at the IRS. In April, 2023, the IRS had approximately 78,700 employees, not counting workers contracted through third parties. These data was gathered in 2021. However, the IRS expressed plans to hire approximately 30,000 additional IRS employees by the end of the 2025 fiscal year.
This would include almost 14,000 hired to the taxpayer services department and almost 9,000 hired for tax law enforcement departments. Regardless of which department the new employees are hired for, however, their focus will be companies, large partnerships, and high-earning individuals.
Audit-Focused Positions
According to an IRS tax lawyer, virtually all the new positions, regardless of the specific department, will involve auditing. Werfel stated in August that attrition has been a problem in the past, and that the specialized technical positions being offered to qualified individuals in the workforce will solve that problem as well. He also stated that the IRS has now approached a milestone goal made several years ago, which was to increase its workforce to 90,000 full-time IRS employees.
Battles for Budget Cuts and Expansion
Partisan squabbling ensued when Werfel pressed Republicans in Congress to avoid future budget cuts to the IRS’s annual appropriation. Funding for the new agents was part of the Democrats’ Inflation Reduction Act, which focused on climate change and healthcare, but also set aside earmarked amounts for improving tax compliance among wealthy Americans and big corporations.
Some critics pushed back against the new funding, saying that it could hurt lower-income Americans in the long run. However, the IRS has consistently promised compliance with Treasury Secretary Yellen’s directive to avoid increasing audit rates for citizens who earn less than $400,000 annually.
According to a California tax audit lawyer, Friday’s announcement came on the heels of recent news from the IRS that open examinations are on the horizon for 75 of the country’s largest partnerships. The ambitious goal for the completion of these examinations is the end of this month.
A tax lawyer in San Jose is the best individual to offer advice and make recommendations to those who believe they may be caught in the crossfire of these new initiatives, or who need help with complex returns or problems with back taxes.