The Tax Times: Your Bigger & Better IRS! - With MORE Enforcement in 2022!

Friday, June 25, 2021

Your Bigger & Better IRS! - With MORE Enforcement in 2022!

The IRS has released details of its fiscal year 2022 (FY 2022) budget request. The request is for $13.16 billion, which is $1.24 billion (10.4%) more than the FY 2021 enacted level of $11.92 billion.

The request includes the following:

Putting taxpayers first. ($176.09 million and an additional 294 full time employees (FTE)) This investment includes: $27 million to add increased security and flexibilities to how the IRS identity proofs and authenticates taxpayers to allow secure access to taxpayer online services such as Identity Protection (IP) PINs in accordance with National Institute of Standards and Technology (NIST) standards; and $149.09 million to develop and implement a Taxpayer Experience Strategy to improve the American taxpayer's experience with the IRS through expanded digital services, increased multilingual services, and an increased presence in hard to reach communities.
Ensure fairness of the tax system. ($340.27 million, +1,833 FTE) Highlights of this investment include:

$154.87 million to increase the audit coverage rate of large corporations (with balance sheet assets > $10 million), pass through entities, and high wealth individuals with adjusted gross income of more than $10 million. Currently, this audit rate is half of what it was in FY 2010-2010;
$41.09 million to expand oversight of cyber-crimes and allow for applied data analytics which IRS can leverage to connect the most remote financial transaction between apparent disparate actors which can be the key piece of evidence to break open the most complex financial investigation;
$13.47 million to enhance taxpayer confidence in the tax-exempt sector which is essential to preserving and protecting charitable tax deductions and the retirement savings of everyday Americans;
$32.90 million to addresses pre-refund audit coverage;
$77.06 million for additional examination and collection employees to increase the individual audit and collection coverage rates; and
$20.87 million to enhance overall enforcement efforts, increase the number of convictions and expand the IRS's capabilities in core tax enforcement areas.