Do you think the IRS has been lax on enforcing tax audits lately? Well, think again. They are in the process of hiring 700 new employees, which means there’s more of a chance you will find an audit letter in your mailbox. Kevin E. Thompson, CPA www.kevinthompsoncpa.com adds “it has been years since we have seen the IRS add bodies solely to undertake examinations. If taxpayers have been aggressive, they could get caught up in this catch-up move.”
The agency has had a 24% drop in employees since 2010 with audits at an 11 year low. IRS commissioner John Koskinen stated that the IRS is losing $4 -$5 Billion a year because they haven’t had enough employees to enforce collections.
Despite the fact that the IRS and the Obama Administration have been asking Congress for more funds to hire more employees, they have had little success. Instead, the funds are coming from retirements, other employees leaving and by refiguring their budget. New hires will focus on small businesses and those who are self-employed. Thompson says “it’s risky for the economy to examine small businesses. They do not have the resources to afford representation nor the additional taxes that may be due.”
Even after this year, the IRS will still be down 2,000 workers as compared to the beginning of the year.