The Inflation Reduction Act bankrolled the IRS to double in size. There has been lots of speculation about drastically increasing the number of auditors and, therefore, audits. The IRS “Enforcement” budget increased by more than $45 billion. What has been missed is the increased budget, more than $30 billion, directed at the IRS for “Operations Support” and “Business Systems Modernization.” You can read that as “information technology.” And don’t overlook that part of the enforcement budget that will be used for information technology as well.
That’s a huge commitment.
There are two major initiatives underway right now at the IRS:
1. IRS Direct File. Building a “Free” tax preparation system. Gathering more taxpayer data.
2. Implementing Artificial Intelligence Algorithms and Models. Analyzing taxpayer data.
Taken together, these initiatives will give the IRS, and therefore the government, easy access to the most intimate pieces of taxpayer information. According to Kaschit Pandya, IRS deputy chief information officer, “The idea is to take all of our data from within the IRS, place it in an enterprise data warehouse, and then build the analytics layer on top of it so that everyone has access to the data that they need in order to carry out an action or research something,”
By focusing on the increased audits, we are missing the real danger here. You can protect yourself from audits in large part. How do you protect yourself from the government gathering all your most intimate information and using it against you?
We have already seen the push to mandate our banks to provide all our banking information to the IRS – don’t think that push is over. We also see the move to digitalize our currency, which would give the government enormous power over when, where, and how we spend our money. And the revelations contained in the “Twitter Files” about government restrictions on what it deems “Misinformation,” should give us all pause.
Information Technology can free us – or imprison us. Which will it be? Personally, I don’t like the direction the IRS is headed.
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