President Biden’s American Families Plan calls for an influx of hundreds of billions of dollars. The plan outlines opportunities to increase the educational offerings available for young children in our country and expand paid family leave options for workers. But how will the government fund this ambitious plan?
In addition to increasing taxes on capital gains for taxpayers who earn more than $1 million annually, the plan also calls on the Internal Revenue Service (IRS) to bring in the funds.
How will the IRS bring in the funds?
For over a decade, the agency has stated it is understaffed. The Biden Administration is looking to increase the number agents within this agency and will push them to crack down on taxpayers who are avoiding their tax obligations. The Washington Post reports speculation within the agency that the IRS will put considerable resources towards “rich tax cheats” instead of “poor grandmothers who claim a grandchild as a dependent.”
The IRS will also target businesses who may attempt to skirt their tax obligations through the use of increased disclosure requirements.
Will the plan combat inequality and raise revenue, as proposed? Or will it unfairly target the rich and lead to a surge in unnecessary and inefficient audits? Only time will tell.
What if I am the target of an audit?
The New York Times reports that those who earn $400,000 or more annually are likely to find themselves under closer examination by the IRS in coming years. With this and the increase in manpower at the IRS in mind, the odds of an audit may skyrocket in the near future.
If it chooses to pursue an audit, the IRS generally sends notification through the mail. Taxpayers who receive these notifications are wise to take them seriously. The attorneys at Goldburd McCone are familiar with these matters and can advocate for your interests on your behalf, better ensuring a more favorable outcome.