IRS Enforcement to Get Priority, Big Bucks in 2010
Congress is sending another $12.2 billion to the IRS this year. Most of the money
will be used for enforcement. It's time to watch out.
By Michael Rozbruch
The United States Congress is finally putting, to use
the old cliché, its money where its mouth is.
That is to say, while Congress has always had a loud
bark regarding tax cheats, its members haven't
always been eager to spend money on the bite.
That changed in the fiscal-year 2010 omnibus
spending bill. During appropriation, Congress
allocated $12.2 billion to the IRS. The majority of that
money is intended to go toward enforcement. This
year, the IRS's enforcement budget will be a record
$5.5 billion.
Concerned? You should be.
Among the main reasons why can be found in the
previous fiscal year. Even before this $12.2 billion
budget infusion, the IRS was firing on all enforcement
cylinders.
Collections in fiscal year 2009 were $48.9 billion -
the third-most collected all decade. What's more,
the IRS had 21,059 revenue officers and special
agents on the streets in 2009 - 339 more than were
employed in 2008.
But that's not the worst of it. Fiscal year 2009 saw
1.425 million examinations of individual tax returns
- the most seen all decade. The IRS also filed more
than 3 million levies and nearly 1 million liens - also
the most seen all decade.
It doesn't take Sherlock Holmes to read the writing on
the tax wall: If fiscal year 2009 was among the most
productive enforcement years for the IRS, fiscal year
2010 - with the extra $12.2 billion from Congress -
should be nothing short of extraordinary.
This new enforcement will likely affect all economic
strata in the United States, from the nation's
wealthiest to Average Joes.
Already, IRS Commissioner Doug Shulman has
announced the creation of a specialized unit to
focus on wealthy Americans with complex business
organization and international operations whose legal
mechanisms may "mask aggressive tax strategies."
This new unit, no doubt, is intended to piggyback on
the IRS's success in piercing the Swiss banking veil
and exposing for the first time U.S. taxpayers who
were hiding assets and money in Switzerland to avoid
tax obligations.
Despite this new unit, an examination of federal
cases show the IRS and the Department of Justice
are still more than willing to go after middle-income
taxpayers.
Recent cases range from the owner of a New Jersey
mortgage business who allegedly did not declare
$836,500 in income to an Ohio radio host who
allegedly did not file taxes and who earned only
$17,945 in 2006.
If you're still skeptical the IRS will go after you, it's
also important to remember that the U.S. government
is facing a continued recession and rising deficits.
While the federal government may be loath to raise
taxes, Uncle Sam is showing himself to be eager to
get what he's already owed.
Now is probably one of the most dangerous times to
be cheating on your taxes. The IRS has shown some
leniency on those who come forward. Maybe it's time
to come clean on your taxes once and for all.
Michael Rozbruch is a Certified Tax Resolution Specialist,
a member of the American Society of IRS Problem
Solvers and a Maryland CPA. You can contact him at
866-477-7762 to obtain a free subscription to his
newsletter titled The IRS Times & Inquirer.