The IRS is auditing fewer returns due to federal budget cuts that have affected staff size. President Biden wants to increase funding for the Internal Revenue Service by $80 billion, an effort his administration says will bring in more … IRS Expected to Audit More Small Businesses in 2021 After years of low examination rates, the IRS announced it will increase audits of small businesses: by 50 percent. Updated March 30, 2021 Studies have shown that preparing a tax return and, by extension, risking an IRS audit can actually raise some people’s blood pressure. There's no sure way to avoid an IRS audit of your tax return, but these red flags could increase your chances of drawing unwanted attention from the IRS. The IRS lost roughly 29,000 full-time positions since 2010, with 14,600 jobs coming from the tax enforcement divisions, due primarily to cuts pushed by Republicans under President Obama. /r/IRS does not represent the IRS. This review is part of our Fiscal Year 2021 Annual Audit Plan and addresses the major management and performance challenge of Implementing Tax Law Changes. (IRS) timely and accurately processed individual paper and electronically filed tax returns during the 2021 Filing Season, including backlogged tax returns received during Calendar Year 2020. In recent years, as the IRS has struggled to hire enough investigators and other staff, its enforcement efforts have increasingly focused on auditing middle-income and poor taxpayers who have far less to spare for Uncle Sam. Originally started by John Dundon, an Enrolled Agent, who represents people against the IRS, /r/IRS has grown into an excellent portal for quality information from any number of tax professionals. by: Joy Taylor April 12, 2021 This sub-reddit is about news, questions and well-reasoned answers for maintaining compliance with the Internal Revenue Service, IRS. In 2019, the IRS told Congress that nearly 40% of its audits were focused on low-income taxpayers. At a recent AICPA event, Harris explained that IRS has maintained fairly low audit examination rates of some taxpayers. In fact, the Service hopes to administer 50% more audits in 2021 compared to 2020. The IRS rejects the notion of unfair audit treatment, saying that critics have misinterpreted the data. Biden’s new spending proposals include an extra $80 billion over 10 years to bolster IRS audits of upper-income individuals and corporations. Reforming the IRS will help generate much needed revenue to begin our climb out of the fiscal hole created by the COVID-19 pandemic. The audit rate for millionaires plunged from 8.4% in 2010 to 2.4% in 2019. With tax … Essentially, this was due to the time and effort it takes for the Service to initiate and conduct detailed audits. 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