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$80 Billion Allocation From Inflation Reduction Act Was Approved: IRS

For many years, the IRS has been severely underfunded. And that has had a huge number of effects.

The IRS had to cut back on staff due to insufficient budget, which resulted in significant wait times for callers who wanted to speak with an agent. Lack of manpower has also resulted in backlogs for processing paper tax returns, which has delayed the arrival of refunds in recipients’ bank accounts, particularly during tax season.

Audits are another consideration. Since there aren’t enough employees at the IRS to undertake them, audits are actually extremely uncommon.

However, some taxpayers might be concerned that will alter now. As part of the Inflation Reduction Act, the IRS recently received a sizable funding round, and some of those dollars will go toward enforcement. The good news is that wage earners should not be concerned about an increase in audit risk in 2023, according to an article published by The Ascent on November 04, 2022.

The Inflation Reduction Act will soon provide $80 billion in cash for the IRS. However, when we consider how that money should be distributed, it becomes evident that, if anything, average people might profit from it rather than suffer from it. The budget allocates to four (4) areas: Enforcement ($45.6 billion), Operations support ($25.3 billion), Business system modernization ($4.8 billion), and Taxpayer services ($3.2 billion).

Being honest is ultimately the best strategy for avoiding audits and navigating them successfully. Even if you earn more money, you might be able to avoid being included on the IRS list.