New IRS Plan: Promises, Promises

April 6, 2023 by admin

Thursday April 6, 2023 – The Internal Revenue Service released its Inflation Reduction Act Strategic Operating Plan today. The plan is more of a “Wish List” or fantasy in my view.

All that was wrong with the IRS will now be made right.

According to the IRS Plan:

The Plan is structured to achieve five objectives, which will be accomplished through a series of initiatives
and projects aligned to each.

Dramatically improve services to help taxpayers meet their obligations and receive the tax incentives
for which they are eligible
Quickly resolve taxpayer issues when they arise
Focus expanded enforcement on taxpayers with complex tax filings and high-dollar noncompliance to
address the tax gap
Deliver cutting-edge technology, data, and analytics to operate more effectively
Attract, retain, and empower a highly skilled, diverse workforce and develop a culture that is better
equipped to deliver results for taxpayers

The new Commissioner, Danny Werfel, calls it “a vision for the future of Federal tax administration.”

The purpose of the plan was to lay out how the IRS was going to spend the $80 Billion from the Inflation Reduction Act. But the plan doesn’t include any numbers until page 131. And then only in a high level, general, and abstract way.

Let’s not forget the IRS scandals of the 2010’s. Not only the targeting of conservative organizations, but the capricious waste of taxpayer money for lavish conferences that included 10s of thousands of dollars for video parodies of Star Trek and Gilligan’s Island.

Attorney Steven A. Leahy critiques the new IRS report on Today’s Tax Talk.

https://www.irs.gov/about-irs/irs-inflation-reduction-act-strategic-operating-plan

https://thehill.com/homenews/ap/ap-business/irs-pledges-better-customer-service-no-new-agents-with-guns/

https://www.cnn.com/2013/06/06/politics/congress-irs-waste/index.html

Steven A. Leahy is a tax attorney in Illinois. He was the host of the long-running popular Radio Show “The IRS Radio Hour” heard every Sunday evening on AM 560 The Answer. Attorney Leahy is also the author of the book “Deal With Your IRS Problems Today!” You can get a FREE copy of this important book at FreeIRSBook.com. Or Call 24/7 (312)664-6649

They Call Him Danny

April 6, 2023 by admin

Wednesday April 5, 2023 – Danny Werfel was sworn in as the 50th Commissioner of the Internal Revenue Service on Tuesday April 4, 2023. While Commissioner Werfel was sitting through his Senate confirmation hearing, the Treasury Department missed its self-appointed deadline to present a plan to the American people on just how they planned to spend the nearly $80 Billion in new funding for the IRS provided by the Inflation Reduction Act. Remember the Inflation Reduction Act? The Act that was passed without a single Republican vote.

Danny is not new to the IRS. He was appointed as the Acting Commissioner of the Internal Revenue Service (IRS) on May 22, 2013, by then-President Barack Obama. Right after the IRS was caught targeting conservative groups seeking tax-exempt status and the previous Commissioner, Steven Miller resigned under a cloud. Think Lois Learner.

Commissioner Werfel has promised the IRS workforce they will receive the credit they deserve. The IRS workforce “has risen to the occasion and delivered for taxpayers with limited resources.” The additional $80 Billion will allow the IRS to treat every taxpayer fairly.

Don’t worry, everything you ever thought bad about the IRS, will be just great. This filing season has been better than the previous filing seasons. You know the filing seasons when the IRS employees stayed home and no one was there to process returns or answer the phone.

Attorney Leahy welcomes IRS Commissioner Danny Werfel on Today’s Tax Talk.

https://www.govexec.com/management/2023/04/new-irs-chief-growing-workforce-will-transform-agency-armed-only-their-calculators/384806/

https://www.irs.gov/about-irs/commissioner-danny-werfel

https://federalnewsnetwork.com/reorganization/2023/04/irs-commissioner-danny-werfel-outlines-plan-to-transform-agency-with-historic-investment/

New IRS Guidance 1099-K

March 24, 2023 by admin

Thursday March 23, 2023 – On this show, I have spoken openly about the new 1099-k information reporting rules for Third party settlement organizations – I think they stink. Recently, the IRS updated their “frequently asked questions about Form 1099-K. We all remember the empty promises made by supporters of this expansion. “This really doesn’t change anything, as these transactions are already taxable.” And “Only payments for goods and services will be effected.”

Now we know, and the IRS has acknowledged, that almost all transactions involving third-party settlement organizations will come under scrutiny and require “Accounting” to explain close to every transaction.

For example, The FAQ page provides guidance on how to report the sale of personal items on Form 1099-K, as well as how to report multiple Forms 1099-K and Forms 1099-K received in error. Taxpayers can report offsetting entries on Schedule 1 for each Form 1099-K they receive separately, or they can combine the Forms 1099-K they’ve received.
The FAQ also address the question “During the year, I sold my personal guitar for $800 on a social media platform’s marketplace and I received Form 1099-K. I purchased the guitar several years ago for $3,000. How do I prove how much I paid if requested by the IRS?” This is what I have been saying from the beginning, and why I thought the explanations given by the IRS, Congress, and their media mouthpieces were, shall we say, disingenuous.

In 2021 the IRS processed 4.7 Billion (with a B) information returns. In 2020 the IRS destroyed 30 million without processing them, because they did not have the resources. With this HUGE increase, look for more delays. Although the delays generally come from paper returns, and the IRS is doing all they can to BAN paper returns.

Attorney Steven A. Leahy looks over the new 1099-K FAQ sheet on Today’s Tax Talk.

https://www.accountingtoday.com/news/irs-issues-new-guidance-on-form-1099-k

https://www.irs.gov/pub/taxpros/fs-2023-06.pdf

FREE IRS Tax Prep?

March 23, 2023 by admin

Wednesday March 22, 2023 – The Inflation Reduction Act provided the IRS with a boat load of money. The Act also put aside $15 million for the IRS to conduct a study to find out how to create a program that allows Americans to file their taxes for free.

As we all know. There is nothing more expensive than when the government gives something away. This free tax filing plan was the brain child of Senator Elizabeth Warren. She insisted this provision be included in the Act before she would support it.

What most of the public does not know is – there is already a free file program at the IRS. If you make less than $73,000.00 you can file your 2022 federal tax returns for free.

However, the Free File progrqam is not used by many taxpayers. According to the IRS, More than 100 million people, almost 70% of all taxpayers, qualify for Free File. Since the program launched the Free File program in 2003, according to the IRS, less than 2% of eligible Americans have taken advantage of it.

Attorney Steven A. Leahy talks about the IRS Proposal to prepare tax returns for all Americans.

https://thehill.com/business/3912232-conservative-coalition-takes-aim-at-bidens-irs-run-tax-preparation-service/

https://www.clickondetroit.com/news/national/2022/09/07/irs-gets-15m-to-find-out-if-it-can-create-online-tax-return-system-so-americans-can-file-for-free/

https://www.irs.gov/newsroom/irs-free-file-launch-aims-to-save-taxpayers-hard-earned-dollars

https://www.cnet.com/personal-finance/taxes/irs-free-file-lets-most-americans-file-their-taxes-for-free/

Biden Budget Adds $43 B to IRS

March 21, 2023 by admin

Monday March 20, 2023 – The Biden Administration’s proposed budget for 2023 is out. The budget proposes increasing spending from $5.8 Trillion to $6.7 Tillion. It’s clear from the administration’s proposals, they are not serious about engaging in any rational discussions on the budget and the debt ceiling.

In addition, the budget drastically increasing the tax rate for those with incomes higher than $500,000 a year and a minimum tax for those with more than $100 million in wealth. The budget also increases corporate rates from 21% to 28%, as well as increase taxes on stock buybacks, investment income and certain federal agencies.

But the BIGGEST surprise in the budget is the boost to the IRS budget. Remember, the Inflation Reduction Act has already provided the IRS with $80 billion for hiring 87,000 additional employees over the next decade, transforming it into one of the largest government agencies. This new budget would add an additional $43 BILLION. The baseline increases by 15% to $14.1 Billion PLUS another $29.1 billion in “mandatory funding for enforcement and operations.”

I have to repeat Rep. Jason Smith’s, chairman of the House Ways and Means Committee, question. “Is this a joke?

Attorney Steven A. Leahy goes over the Biden Administration’s new budget on Today’s Tax Talk.

https://elamerican.com/biden-wants-more-money-for-the-irs-43-billion-this-time/

https://waysandmeans.house.gov/never-enough-biden-budget-seeks-absurd-43-2-billion-for-irs-despite-receiving-unprecedented-80-billion-windfall-just-last-year/

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New IRS Plan: Promises, Promises

They Call Him Danny

New IRS Guidance 1099-K

FREE IRS Tax Prep?

Biden Budget Adds $43 B to IRS

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