Should You Be Worried?

The IRS is hiring. It’s not just looking for call center employees or seasonal help for the next tax season. It’s planning to add more auditors — tens of thousands more. And that will likely increase your chance of being audited.

What’s Going On?

The IRS is staffing up under the Biden Administration’s infrastructure plan, which includes plans to increase tax enforcement on wealthy individuals and corporations and potentially narrow the nation’s tax gap — that pesky chasm between what the IRS thinks it should be receiving in taxes each year and the amount actually paid. 

The agency claims it’s replacing lost employees; it lost nearly 33,000 employees over the past decade, according to CNBC. So far, these new hires are being added to the small business and criminal investigations teams, indicating a greater focus on tax violators in these categories. As hiring ramps up, it’s possible that more auditors will be assigned to the wealthy. 

Here’s What’s Supposed to Happen

The intent is for the IRS to go after the wealthiest taxpayers — those who can afford high-powered lawyers and accountants to help them minimize their taxes, sometimes reaching ludicrously low levels. Economists agree there’s a lot of money to be found in the wealthiest population segments. Whether these new auditors can find that money and collect it is another matter.

Here’s What’s Happened in the Past

By far, the lower-hanging fruit is regular taxpayers, individuals with average incomes and small businesses with modest revenues. Many pundits watching this situation have noted that with the decrease of IRS auditors during the past decade has come an increase in the audit frequency in marginalized and working-class segments of the population, communities whose tax returns take the least time and effort to audit. Wealthy taxpayers seem to have dropped off the radar.

Here’s What All This Means for You

It may only be a matter of time before the IRS’s new audit army gets tired of arguing with wealthy taxpayers and moves on to small businesses and individuals. If you’re in one of these categories, it’s more important than ever to ensure your taxes are calculated correctly and filed according to IRS rules every year.  

Hire an Accountant Who’s a True Partner

Adams Accounting Solutions is a true partner when it comes to preparing taxes. We get the job done accurately and on time. If you’re concerned about being audited, we’ll talk you through the process and educate you on what happens during an audit. 

It’s important to remember that being chosen for an audit doesn’t automatically mean you did something wrong. It just means the IRS found something it wants to check out more closely. If you get audited, we’ll go through the audit with you, acting as a buffer, answering questions on your behalf, and working with the auditor to complete the audit as quickly as possible.

Being audited is stressful. Let us help. Call Adams Accounting Solutions today.