Morning Wire Tax Season: New IRS Rules | Sunday Extra
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Apr 2, 2023 Tax season is buzzing with changes at the IRS, especially after a hefty funding boost. The agency is ramping up customer service while tackling outdated technology. Concerns rise over new audit policies that may target middle-income families and small businesses more closely. The discussion also highlights new regulations on payment apps, potentially confusing casual sellers with lower reporting thresholds. Finally, the ongoing debate on billionaires' tax contributions questions the fairness of the current tax system.
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IRS Changes and Funding
- The IRS has improved phone answering times due to new resources, but remains largely dysfunctional.
- A plan for the $80 billion in new funding is still pending, with concerns about modernization and audit allocation.
Impact of Business Tax Increases
- Tax increases on businesses get passed down to consumers as higher prices or employees as lower wages.
- Economists across the spectrum acknowledge this economic reality.
Increased Audits on Lower Earners
- Despite claims of not increasing audit rates for those earning under $400,000, more audits overall mean more people below that threshold will be audited.
- This is because the majority of Americans earn less than $400,000.