Remember that $80 billion chunk of change that the government was going to spend on expanding the IRS? They did this to try and close what’s called the “tax gap.” The IRS says this gap is the $600 billion a year lost in taxes from wealthy tax-evaders and big corporations, not the little people. But is that really how it's working out?
Here are Five Fast Facts on the IRS’s expansion:
- 🤞 The Promise - The government **Promises** that the IRS expansion would only target people/businesses making over $400k. In fact, they even suggested that the little people would have an even lower chance of being audited than before. Trust us, they said…
- 💰 Finding Billions In…Tips?! - One of the first proposals from the IRS was to crack down on tips. You know, to finally root out all those filthy rich waitresses, Uber drivers, and dog groomers, hoarding their wealth and hiding it from the government.
- 🔍 New Tracking System - The IRS is planning to replace the current system of self-reporting tips with one that uses a point-of-sale system to track every sale that might be tipped. The business itself would then have to report all tips to the feds. Say what?? Do they get a deputy badge and everything?
- 📝 (Not) Audits - Some think this new system will simply transfer the audit function from the IRS to the business. If the business doesn’t report tips correctly or adequately, it will get a “compliance review.” But don’t worry, THE REVIEW IS NOT AN AUDIT.
- 🏢🚚 (Not) Small Businesses - The IRS claims that self-employed people and small businesses cause 8 times the underreported income tax compared to big businesses, but a recent study disproved that, so one might reasonably wonder why the IRS is coming after them.
🔥Bottom line: We have a theory on that. Small businesses make up over 99% of all businesses in the nation, and employ almost half of the workers. So, if the IRS is looking for tax money, that’s where it is. But this is not really the bargain we thought we were getting, and it’s not going to be good for Paychecks.
What do you think about the new IRS?
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