IRS Need to Close Tax Gap Should Put Payers on Alert in 2013

The financial pressures on the country are about the only things that seem to be a certainty these days. The recent stop-gap move by Congress this past week has avoided the fiscal cliff for now, but there are a lot of things that lawmakers in Washington, D.C., are going to have to deal with in the not too distant future. Some in Congress say we should not expect to see much of anything but financial crisis questions on the docket through March.

Meanwhile, the reality of the federal budget deficit and the need for operating funds now continue to put pressure on the Internal Revenue Service. So, what does that portend for the nation in terms of tax collection? Some analysts say be prepared for a stepping up of IRS audits.

The gap that the IRS seeks to close is said to amount to about $450 billion dollars. That’s the difference between what the agency is expected to collect and what it believes people really owe.

Officials say they suspect that the gorge is so wide is because of underreporting of income and an overstating of deductions. And they say they think the segments of the population most responsible for that activity are affluent individuals and small businesses. As a result, IRS examiners are expected to ramp up their use of technology to find and go after audit targets.

Anyone in the D.C. area who has faced the prospect of dealing with the IRS knows that the tactics and processes the agency uses can be emotionally draining and personally intrusive. There are, of course, the potential financial consequences that could result, as well. These are matters that no one should try to face without the help of experienced legal support and engage that help sooner, rather than later, is always best for optimal outcome and peace of mind.

Source:Financial Planning, “Unlucky 13: Small Businesses to Face Reg Changes in 2013,” Michael Cohn, Dec. 27, 2012

Tags: Blog, IRS