I hope you have managed to stay safe and well! We focus on resolving tax issues in Prince William County and throughout the lower Northern Virginia area.
The IRS suspects that revenue lost from tax cheating numbers into the Trillions of Dollar$. This figure takes into account noncompliance regarding transactions from virtual currency (hence the question on the front of the 1040 for 2019 and 2020 about virtual currency transactions); undisclosed offshore transactions (with the economy truly being a global marketplace); abuse stemming from the use of pass-through entities (S-Corp use without reasonable compensation payroll) and tax-exempt organizations (unrelated business income tracking); and not to mention illegal-source income. So, of course the Biden Administration would make a push to close this yearly tax gap, and generate revenue for programs like the new Child Tax Credit Program (will pay qualifying families monthly advance over the remainder of 2021, beginning in July), and any other domestic policy programs that may be in the pipeline.
One of the ways the Biden administration is proposing to close and combat the tax gap, is to increase the funding to the IRS, which would in turn, increase its enforcement activities. The proposal would increase IRS’s enforcement budget by at least $800 billion over the next ten(10) year period, with the intention that the extra funding would allow IRS to hire and train more Revenue Officers, with their focus to be on complex audits. The IRS would also like to overhaul its outdated technology systems, in order to more easily detect tax evasion. The claim is that overall audits will not rise for individuals and families making under $400K.
The Service is also seeking statutory oversight of tax preparers. Designed to combat ghost preparers (those that prepare returns, collect fees, but don’t sign the returns). Eliminating a major source of tax evasion by cracking down on those that devise schemes whose sole purpose is to avoid paying taxes (while it is not illegal to avoid taxes, a transaction or group of transactions sole purpose cannot be to simply avoid the proper payment of taxes)
If you feel as though you may be one of the taxpayers having trouble with staying or becoming compliant with your tax obligations, with the regulatory authorities, We can help!.
IRS plans to have more reporting of transactions like PayPal, CashApp, cryptocurrency exchanges, and foreign financial institutions.