Increased Funding at the IRS

Accounting Articles

For the past few decades, the IRS has had budget issues often with reports of underfunding. As part of the Inflation Reduction Act of 2022, the budget issues with the IRS will change. While the IRS will receive its normal appropriation, the IRS is now going to receive an additional $3.2 billion in taxpayer services, $45.6 billion for enforcement, $25.3 billion for operations support, and $4.8 billion for business systems modernization. The expectation is that the US government will receive additional revenue through enforcement.

This means that the IRS will have an increased capacity for analyzing tax returns and conducting audits. In light of the increased funding, I would advise caution in reporting business activities as we make decisions approaching the end of the year and years to come. The one silver lining is that the IRS will increase customer service and will likely be more accessible to U.S. citizens.