Dealing with the IRS has never been simple, and reaching a tax settlement agreement is almost always challenging. If you are working to pay off your tax debt, you may wonder what the recently enacted “Inflation Reduction Act of 2022” means for you and your efforts to pay down tax debt.
The Inflation Reduction Act and its implications have been the subject of much debate. While the details of the agreement are still being worked out, there are some facts you should be aware of to understand how this law may affect you as a U.S. taxpayer. Listed below are some crucial factors to think about going forward.
4 Facts About the Inflation Reduction Act of 2022
The “Army” of IRS Agents Are Not All Soldiers
Much has been reported about the rumoured army of IRS officers who will soon be patrolling American streets. Some commentators and politicians assert that the Internal Revenue Service will hire 87,000 armed agents to hunt down innocent taxpayers and steal their hard-earned money in waves.
In contrast to what you may have heard, the reality behind the army of IRS agents is different and less alarming. Most of the new hires will be administrative staff, IT professionals dedicated to replacing outdated hardware, customer service agents to answer the ceaseless ringing of the phones, etc. That doesn’t mean there won’t be new agents on the job, but the scope of new hires isn’t a reason to worry, even if you owe money to the IRS.
Enforcement Efforts Will Ramp Up
Even if just a portion of these new IRS workers will be “on-the-ground agents,” the ultimate objective of this bill is to increase the amount of tax money collected by the IRS. Due to the Inflation Reduction Act, there is reason to expect the IRS to be more active in its collection activities.
This bill raises concerns that the IRS may audit more small business owners and normal taxpayers. The government claims the IRS targets people with higher tax brackets. However, you can never be sure because it doesn’t say they won’t target ordinary taxpayers. If you suspect you owe the IRS money, take it seriously to avoid extra costs. Otherwise, the IRS may freeze your bank account and garnish your wages.
If You Have an Agreement in Place, Nothing Should Change
Even before the “Inflation Reduction Act of 2022” was passed, the IRS had ramped its enforcement actions against taxpayers. If you’re subject to one of these actions, the IRS will not stop until you reach a settlement.
When dealing with the IRS, you should hopefully work with a professional. The settlement process can get pretty complex. A tax relief specialist can help you negotiate the best possible settlement for your unique circumstances.
The IRS may try to drive a tougher bargain if you are still working through the details of a settlement. This could happen if the amount owed is more than $10,000. In either case, working with a tax resolution professional is important because ignoring the problem will only worsen it. The longer you wait, the more money you’ll have to spend.
Professional Tax Relief Guidance is More Important Than Ever
The enactment of the Inflation Reduction Act has created anxiety among taxpayers, especially those who owe the IRS money. If you’re not currently working with a professional, obtaining outside help becomes even more crucial.
That is why it’s important to work with a professional. Do yourself a favour by contacting a tax resolution specialist like Peace of Mind Tax Help. We help people solve their IRS and state tax problems so they can put them behind once and for all.