Obama proposed nearly doubling funds to enforce tax compliance and has asked Congress for a $400 million boost for IRS enforcement activities in fiscal year 2010, to support its goal of cracking down on offshore tax dodgers.

The additional $400 million is an increase of about 8% that would bring the total IRS enforcement budget to around $5.5 billion for FY 2010. By doubling the tax law enforcement budget, the White House hopes to collect an additional $17 billion in taxes by 2010.

Obama has also announced a legislative proposal to hire 800 new IRS agents to enforce the tax code and focus on the offshore tax problem to help close the $345 billion tax gap.

The IRS also plans to triple the total amount it pays to informants who help catch tax cheats. Such payments totaled $22 million in 2008. The IRS expects to pay out $50 million to informants in 2009, and has budgeted another $75 million for 2010.

According to The Wall Street Journal:

Mr. Obama also proposed steeper levies on payments to federal contractors that owe back taxes to the IRS. The administration asked to increase from 15% to 100% the amount of federal payments to contractors that the IRS can levy.

The current limit of 15% is due to a technical error in a 2004 law, according to the White House budget proposal.

In addition, the administration would allow such levies to be imposed more quickly than under current law. The proposal would allow levies on contractor payments before all IRS administrative appeal processes have run their course.

The White House estimates that the two changes would allow IRS to collect roughly another $200 million a year in delinquent taxes.

The IRS is growing increasingly aggressive when pursuing tax cheats. If you can’t afford to pay your taxes or have unfiled tax returns, it’s more important than ever to know your options for income tax relief!

** If you have unfiled tax returns or other IRS problems, contact our specialized staff of tax attorneys, CPAs, EAs and tax professionals. Visit the Tax Resolution Services web site  for a free tax relief consultation or call us at 866-IRS-PROBLEMS.

More Tax Help, IRS News and Tax Relief Tips:

1. IRS Asserts Position on Tax Protesters: Sanctions Imposed for Advancing and Maintaining a Frivolous Argument
2. Closing the Tax Gap Could Pay Back $700 Billion Bailout in 2 Years
3. In Bad Economy, Tax Enforcement and Convictions of Tax Defiers Are on the Rise
4. IRS Strategic Plan Addresses the Tax Gap and Focuses on Service and Enforcement over the Next Five Years
5. No Income Tax Rate Increase Until 2011 But Expect Increased IRS Audits of Tax Returns in Near Future

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This entry was posted on Friday, May 8th, 2009 at 6:29 pm and is filed under Tax news and tips. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.