Individual filers’ tax season began on Monday, with a larger IRS customer service department and improved technology, according to Treasury officials.
The Inflation Reduction Act gives the agency $79.6 billion for the next ten years. At least half of those funds are going to tax enforcement. The IRS is attempting to raise audit rates for higher earnings who cheat ordinary Americans by underpaying or not paying their taxes.
The IRS is taking great steps toward addressing high-end noncompliance, resource constraints limiting the work that the agency can do. There are only about 6,500 front-line, revenue agents who are in the field performing these types of exams. These resource limitations result in levels of enforcement activity at the high-end of the distribution, particularly for global high net-worth individuals, large corporations, and complex structures like partnerships are far lower than in the past. Indeed, overall audit rates for those high-end returns have substantially declined over a seven-year period.
Furthermore, audits of higher-income taxpayers frequently occur later in the statutory time-frame within three years of a filing implying that audits for 2019 may still occur until at least 2023, according to the agency.
The IRS is also using funds from the Inflation Reduction Act to make customer service improvements and technological changes on the IRS website.
The IRS has employed 5,000 more customer service representatives in order to “substantially improve” the volume of calls answered.
The IRS also intends to enhance customer service through technology, such as allowing filers to respond to some IRS notices electronically and scanning paper returns.
The IRS reports that taxpayers have until April 18 to file their taxes this year, but some taxpayers living overseas and disaster victims may have later filing deadlines. Alabama, California, and Georgia storm victims now have until May 15 to file various federal individual and business tax returns and make tax payments.
Over the past several months, the IRS has hired 5,000 new customer service staff, aiming to “significantly increase” the number of answered calls, Deputy Secretary of the Treasury Wally Adeyemo said Friday. Furthermore, Adeyemo said, “These improvements showcase how we are modernizing both technology and customer service to bring the IRS into the 21st century and how the IRS plans to deploy the Inflation Reduction Act resources in the years to come.”
2021 tax returns still being processed: Taxpayers can check Where’s My Amended Return? to find out the status of their tax year 2021 Form 1040-X and can still file their 2022 tax returns even if their 2021 tax returns haven’t been processed. Visit the IRS Operations page for more information on what to expect.
April 18 tax deadline: This year, the filing deadline is April 18 for most taxpayers, but automatic six-month extensions of time to file are available for anyone for free. See Extension of Time to File Your Tax Return for instructions. Taxpayers should be aware that filing Form 4868 only extends the time to file tax returns. Those who owe taxes should still pay by April 18 to avoid late payment penalties.
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