Tuesday, February 24, 2015

I guess this is the year to screw up your taxes and probably NOT get caught. The IRS has been hit by funding cuts; so the chances of being audited are the lowest in at least a decade. More people are filing tax returns, but the IRS is auditing fewer filers’ as the agency’s budget and staffing drops. Who exactly is this good news for? We all hate being audited but we like to hear that our government agencies are being run well too. The number of revenue agents have dropped too resulting in a drop in the percentage of the returns that are audited. Revenue agents have focused their efforts on higher-income filers but audit coverage is still down.

After rising steadily from 2005-2010, the number of IRS audits for individual taxpayers fell 21% during the succeeding five years, the data show. Audits fell in every individual category and across income levels even as the number of individual tax returns filed rose in all but two of the past nine years. The audit declines coincide with recent drops in IRS funding and a steady falloff in revenue agents. It also comes as the tax agency seeks congressional approval for a fiscal year 2016 budget hike after being buffeted over dwindling taxpayer services   and allegations it targeted conservative tax-exempt groups for increased scrutiny.
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IRS Commissioner John Koskinen conceded that the agency is “not the world’s most beloved.” But he warned that the audit rate decline could eventually “corode” American’s faith in the federal tax system and undermine voluntary payment compliance. “At this point we do have a tax compliance ethos and people pay their fair share.” said Koskinen who was to address the audit problem in a speech to the New York State’s Bar Association’s tax section. It is a problem if you know someone who is not paying their share of taxes according to law.

Arguing for additional budget funding, Koskinen cites IRS data that show restoring the number of revenue agents would produce nearly $1.3 billion dollars in new government enforcement revenue once new hires complete training and reach full working potential in fiscal year 2018. When asked whether the IRS could shift workers from other jobs to revenue agent jobs, he said auditors require   time-consuming training. Also, the tax agency’s overall personnel count is down 13,000, a total that will rise to an estimated 16,000 this year, he said.

So, as I see it, Congress and the Senate Committee on Finance is telling the tax guys screw you we will not finance you as long as you audit our special interest groups. To me it looks like blackmail and one hand washes the other and tit for tat tactics are alive and well in politics and on Capitol Hill. Let’s not do what is good for the country, let’s take care of ourselves mentality is running rampart all over Washington and it is disgusting. 

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