Lawmakers are concerned that the IRS is heading towards tax day

By Casey Harper (Centre Square)

Tax day is fast approaching, but lawmakers are sounding the alarm that the IRS may not be ready to deal with the litany of new rules and regulations implemented by the Biden administration.

House Ways and Means Committee Chairman Jason Smith, R-Mo., and Oversight Subcommittee Chairman David Schweikert, R-Arizona, sent a letter to the Comptroller General of the U.S. Government Accountability Office making share their concerns that the additional burdens imposed by recent legislation imposed by the Biden administration could put the agency in trouble.

“In fiscal year 2021, the Internal Revenue Service (IRS) received more than 4.7 billion information returns — reports provided to the IRS to track payments and business or business transactions — filed by third parties, most of which were filed electronically,” the letter said. .

The Biden administration successfully secured $80 billion for the IRS to strengthen the audit, but also set more expectations such as auditing and tracking more transactions.

“In addition, recent legislation has significantly lowered the threshold to $600 for reporting certain types of payments, such as those made using a third-party platform like PayPal or Venmo,” the letter states. “New information reporting regulations for transactions in these digital assets could result in the filing of billions of additional information reports.”

The IRS had previously delayed implementing the rule related to PayPal and Venmo. Lawmakers called the IRS’ decision a “tacit admission” that it is not ready for the new administrative burden.

“While information reporting can help the IRS ensure the accuracy of tax returns and encourage voluntary compliance with tax laws, these goals must be weighed against the burden that such reporting places on taxpayers, suppliers third parties and to the IRS,” the letter said. “Many Americans who will likely be subject to these new requirements — especially given the low $600 reporting threshold — will also likely struggle to afford the level of accounting and tax preparation services that may be needed. .”

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The agency is still recovering from the burden of administering COVID-era stimulus checks, which has helped cause a backlog of tax returns that the agency is still managing. The IRS also caught fire after reports surfaced that a 2021 report by the Treasury Inspector General for Tax Administration showed the agency had destroyed about 30 million taxpayer documents, files whose Americans might need it in the future if they were audited.

In February, lawmakers raised many of these kinds of concerns during confirmation hearings for Daniel Werfel, Biden’s nominee to head the IRS who was ultimately confirmed.

“Massive backlogs have left families and small businesses desperate for much-needed returns as they battle runaway inflation,” U.S. Sen. John Barrasso, R-Wyo., said during the hearing. . “Restoring the credibility of the agency is going to be a steep mountain to climb. During our visit, I said that this would be essential in the context of your work. The policies enacted by President Biden’s reckless tax and spending bill will really not be helpful in trying to win back the credibility of the American people for the agency.

Tax day this year is April 18.

Syndicated with permission from The central square.

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