Last week, we wrote about the use of outside debt agencies to start collecting tax debts (you can check out the blog here). In conjunction with this, the IRS recently announced the end to their hiring freeze. That’s right, America’s best-loved agency is beefing up its staff. In fact, they plan to grow the department by six to seven HUNDRED. So other than a staff increase, what will this mean for you and me?
1. Notices Will Come Faster
With the recession, we saw tons of IRS layoffs. Since then, hiring requests have continued to be denied—until now. With the increase in staff will come an increase in follow-up (and probably not the good kind). Basically, this means that the IRS will be noticing tax debt much more quickly. If you owe back taxes and have been skating by, hoping your debt will go unnoticed, your luck has just run out.
2. Scrutiny Will Go Up
Now that the IRS will have more staff, they will also have more hands to review filings. What will this mean for small businesses? A lot more investigations. Made an error on your taxes in the past? That might come back to haunt you. Fudged the numbers on deductions? You’re at risk for a call. Basically, scrutiny will be in full force, so expect the number of audits, wage garnishments and bank levies to rise rapidly.
3. Pursuit of Debtors Will Increase
As response time and scrutiny levels improve, it’s clear that the pursuit of those who owe back taxes will be emphasized.
The IRS has estimated that there is a $458 billion tax gap. A tax gap is basically the amount the IRS SHOULD have collected versus the amount they have actually received. With increased staff, the IRS will now be determined to start closing that gap. It might not be far-fetched to guess that part of this hiring spree is specifically for this purpose.
If you owe money to the IRS, don’t wait until you become a target. Work to resolve your tax debt today. Contact us at 1-877-505-4829 for your free consultation.