In 2014, Congress slashed the IRS budget by nearly $350 million, putting their budget at 10.9 billion, the lowest it has been since 2008. These cuts will leave the IRS operating at a capacity of 17% less than usual and are anticipated to lead to a good amount of staff cuts. So if you are looking to call the IRS for any reason this tax season, don’t expect much. They have even openly stated that only 50% of callers this tax season are expected to actually get in touch with a representative. Those who do get through may have to wait on hold for 30 minutes or more to talk to someone who will answer only the simplest questions.
Overall, these budget cuts will lead to a significant reduction in the amount of audits that will take place this year. The magic number? One million audits. This still may sound like a lot, but this number is down nearly 200,000 from 2014 and 400,000 from 2013. This has created concern for IRS commissioner John Koskinen who says that this pullback will result in $2 billion dollars in uncollected taxes this year. He estimates that the IRS has left $6 billion to $8 billion uncollected since 2010 because its enforcement division is operating under capacity by 5,000 employees.
Not to mention, this will all be occurring in one of the most reformed years for tax law we have seen in a while. This will be the first year that the agency will have to assess whether those filers who got health insurance subsidies under the Affordable Care Act were given the right amount based on their actual 2014 income, rather than the estimated income they used when applying for coverage. Be sure to refresh yourself on the new policies this tax season.
The Affordable Care Act has made things a bit different this year. You can do so by complete the Annual Filing Season Program (AFSP). It is crucial that tax return preparers up to date on the newest policies and procedures and that is exactly why the AFSP was created. The AFSP is composed of an Annual Tax Refresher course with the curriculum provided directly by the IRS to ensure the highest quality and accuracy and tax law content. Those who complete the course will earn a record of completion and are placed in a directory of tax return preparers with select qualification on the IRS website. To learn more about the AFSP go to: http://www.irs.gov/Tax-Professionals/Annual-Filing-Season-Program.
