In the recent $1.3 trillion omnibus package that Congress passed and President Trump signed into law, there was an additional $320 million for the Internal Revenue Service to implement the tax cuts voted in last year. The money can be used to roll out taxpayer services and enforcement.
In addition, $196 million was added to the agency's annual budget. That should help with attrition at the IRS, which lost more than 6,800 staff positions over the past few years. The attrition had resulted in less aggressive enforcement in recent years. In 2017, for example, audit rates were at the lowest levels in 15 years. The IRS filed 5% fewer tax liens. Tax collection levies fell more than 30%.
All that is about to change.
More Aggressive Enforcement
The Tax Cut and Jobs Act of 2017 changes tax rates, brackets, and tweaks deductions. Withholding rates that were effective last year may no longer work in 2018. To make sure you comply on withholding rates, the IRS will direct you to Publication 505. Publication 505 is comprised of, 50,000 words spread over 59 pages. That's for just one of the changes you'll need to review.
Many American taxpayers and business will find themselves under the microscope for changes in the tax code that haven't been fully explained by the agency itself.
There will be more audits, more liens and collection levies, and a more aggressive enforcement level. Hiring a tax attorney to help you make the right decisions can dramatically minimize your risks.
The IRS May Not Be Able To Help You
Don't look for much help from the IRS. The agency gets 100 million telephone calls each year with questions, but its own records show they can answer only 60%. The answers they give are not always accurate. Audits have shown mistake rates by the IRS between 15% and 30%. Acting on inaccurate information-even those providing by the tax collection agency itself-does not protect you from penalties.
Confusion Over Implementation
There also is confusion on implementing the new tax laws. The Trump administration urged the IRS to prioritize speed in rolling out new guidelines and forms, but the expectation is that many will wind up overpaying or underpaying taxes. That can lead to penalties and an even larger tax bill.
Avoid Mistakes: Hire A Tax Attorney
The IRS tax regulations exceed 7.5 million words, according to the Tax Foundation, incorporating more than 6,500 pages. That doesn't include 60,000 pages of case law that impacts how the regulations are interpreted.
Experts say your best bet is to hire a qualified tax attorney to help navigate the changes and make sure you are maximizing your tax situation. If you are being levied, have a lien on your home, being audited, or have unfiled tax years there are many options that we can provide to give you a good night's sleep again. Having the feeling of being underrepresented is a struggle of itself. Call Travis W. Watkins Tax Resolution and Accounting Firm for your Free consultation at 800-721-7054.