CNBC reports that the US Congress will be handing the Internal Revenue Service (IRS) $79,6 billion through the Inflation Reduction Act — not only for tech modernization but also for more tax enforcement. What does that mean for American taxpayers living overseas?
As of July 29, the IRS had a backlog of 10.2 million unprocessed individual returns. Taxpayers were trapped in this outdated, paper-based system because Congress has systemically underinvested in the IRS.
That $79,6 billion is more than six times the current annual IRS budget of $12.6 billion. Treasury and IRS officials say they expect this funding will allow them to automate more of this process so that returns can move through more swiftly.
The bill also states that a whopping $45.6 billion will be for tax enforcement, and make no mistake, enforcement is the main directive from Democrats to the IRS.
The goal is to make the IRS tougher and faster at collecting and making you pay. 87,000 IRS agents will be hired, an army to amplify tax-enforcement efforts and catch up on tax returns.
A Congressional Budget Office (CBO) analysis predicts that the hiring of all those agents would result in more than $200 billion in tax dollars taken from Americans over the next decade. And further analysis indicates that money would come from IRS audits against families making less than $200,000 a year.
What does this mean for the American living outside the U.S.? That your tax return, if you file on paper or answered a letter from the IRS, will soon be processed faster. This is advantageous, for example, for receiving refunds or confirmations as a result of your tax return.
Contact Americans Overseas for more information on the current withholding arrangements offered by the IRS. These kickback repentance schemes have so far had the rule that one can file penalty-free returns with a limited number of years in the past. It is not clear when these schemes will end, however it does sometimes give the opportunity to still receive Economic Impact Payment.
It also contains information on several repentance schemes, including the Streamlined Procedure, which allows you to return to the tax system penalty-free.
Do you have more questions about the IRS tax enforcement bill? Contact Americans Overseas, and we’ll be happy to help, with no obligation and no cost.
Understanding the US tax system, the obligations, and all the additional terms can be difficult. Especially if one lives outside of America. Is your question not answered? Contact us.
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