In 2022, the IRS received a major cash infusion with the passage of the Inflation Reduction Act (IRA), totaling $80 billion over the next 10 years. Some funds will replace outdated computer equipment and enhance customer service. However, much of the funding will be used for increased tax enforcement. Under the IRA, the IRS will see increased funding in the following areas:
- $45 billion for enforcement, including audits, tax fraud cases, criminal investigations, legal support, and digital asset monitoring.
- $25 billion for operations support, including updating telecommunications and legacy IT systems.
- $4.8 billion for modernizing business systems, including technology to enhance customer service.
- $3 billion for taxpayer services, including pre-filing education and assistance.
Many people wonder if the increased funding will result in more tax fraud cases. This is highly likely, based on the fact that the tax agency will receive $45 billion for more enforcement activities.
If you have unpaid taxes and are under investigation by the IRS, you need to take the matter seriously. The IRS now has the funding to go after people more aggressively accused of tax fraud. Learn the details about the IRS’ plans its new funding below, then contact our Chicago tax fraud lawyers at the Law Offices of Vadim A. Glozman for assistance.
Increased Funding To Help Collect Billions In Uncollected Taxes
It is expected that billions of the new IRS funding will be used to recoup the more than $600 billion in taxes that are unpaid annually. Higher-income Americans and businesses who underreport their income owe much of the money. In addition, the higher funding will allow the IRS to hire more agents who will collect at least $400 billion in taxes over the next decade, and it could be more.
While some Republicans argue that the increased funding will lead to more audits and tax fraud cases against average Americans, Treasury Secretary Janet Yellen says that is untrue. She stated last year that the increased IRS resources would not be used to increase the number of audits and tax fraud cases against businesses and households that make less than $400,000 per year.
Millionaires Could See More Tax Fraud Cases And Audits
The IRS audited only 2.2% of tax returns filed by millionaires in 2022, a steep drop from 2015. While most regular wage earners cannot easily avoid paying taxes they owe because the money is taken automatically from their paychecks, the wealthy have more chances to avoid paying taxes. This is because their sources of income may be harder to track, and they can hire attorneys and accountants to fight the IRS.
What About IRS Criminal Investigations?
There will likely be more criminal investigations involving tax fraud and related crimes. In FY 2022, the IRS started 2,550 criminal investigations and identified over $31 billion from tax and related financial crimes. It also had a 90% conviction rate on these cases, so if you are under criminal investigation by the IRS, it is vital to hire a Chicago tax fraud attorney today.
The increase in tax fraud cases occurred before the IRA was passed. Even during COVID, the IRS started more criminal investigations in 2021 than it did in 2019 and 2020. With more funding, it is expected that more enforcement will occur in the next decade. Overall, the IRS is hiring more Special Agents and staff to expand their tax investigations.
Further, in 2021, the tax agency made more recommendations to federal prosecutors to issue criminal indictments, and the prosecutors did so. Also, the IRS criminal division stated in 2021 that it had revealed over $2 billion in tax fraud. It also uncovered $8 billion more because of related financial crimes.
What Should You Look For In A Tax Fraud Lawyer?
If you have a tax problem and worry about tax fraud charges, you need a tax lawyer immediately. When looking for an attorney, remember to look for these attributes:
Experienced And Specialized
It is essential to be sure that your lawyer specializes in tax law. While any licensed Chicago attorney can represent you, a tax attorney has the skills and experience to resolve your tax issues effectively. You would not go to an orthopedic surgeon for brain surgery, so you should not hire a real estate attorney for your tax fraud case.
Strong Accounting Background
When hiring an IRS tax lawyer, you should ask the prospect a few questions to test their qualifications. A big help is if the attorney was an accountant in the past. A tax attorney with an accounting background will better grasp your financials and can use it to help when negotiating with the IRS.
You also should find out how far the tax attorney will take your case. Some tax lawyers simply file the paperwork to resolve your case, but they will not enter negotiations with the tax agency. They also may not help you with the appeals process if the IRS denies your tax resolution request.
Also, the IRS may partially deny the resolution and demand you pay more money. If your attorney does not handle this, you may wind up with a resolution where you pay more than you can afford. Also, some attorneys do not help with wage garnishments or bank levies.
When talking to an attorney, find out what steps they will take to resolve your tax case. Get everything they will do for you in writing. Some lawyers will have more fees if they need to appeal or file for more years where you owe money. This is fine, but be sure these additional costs are spelled out to you.
Contact Our Chicago Tax Fraud Lawyers Today
If you face a tax fraud case in Chicago, you must hire quality legal representation immediately. The IRS has more resources after the IRA passed, and can turn your life upside down if you are convicted. You should also have a qualified tax attorney if you are facing an IRS audit, have unpaid taxes, or unfiled tax returns. Contact our Chicago tax fraud lawyers at the Law Offices of Vadim A. Glozman today for assistance.