{"id":15111,"date":"2025-03-02T17:48:46","date_gmt":"2025-03-02T16:48:46","guid":{"rendered":"http:\/\/13.40.31.108\/?p=15111"},"modified":"2025-03-03T20:22:03","modified_gmt":"2025-03-03T19:22:03","slug":"tax-season-just-got-more-confusing","status":"publish","type":"post","link":"https:\/\/ustaxconsultants.es\/es\/tax-season-just-got-more-confusing\/","title":{"rendered":"Tax Season Just Got More Confusing"},"content":{"rendered":"

\"\"Tax Season Just Got More Confusing.<\/strong><\/p>\n

The IRS was starting to modernize\u2014then the Trump administration intervened, by\u00a0Lora Kelley (The Atlantic)<\/p>\n

Americans love to hate the IRS, that\u00a0historically unpopular\u00a0revenue-collection agency with its slow processes and fax machines and many, many forms. But recently, it has started to turn things around, at least by some measures: After receiving tens of billions of dollars from the 2022 Inflation Reduction Act (IRA), the agency\u2019s\u00a0customer-service waiting times\u00a0went down, its\u00a0tech initiatives\u00a0helped simplify tax filings for some, and its audits led to the recovery of\u00a0more than $1 billion in unpaid taxes\u00a0from wealthy Americans and corporations.<\/p>\n

That progress may now be imperiled. As part of the Trump administration\u2019s plan to downsize the federal government, the IRS has been ordered to start firing as many as 7,000\u00a0IRS employees\u00a0in the\u00a0middle of tax season, including 5,000 people who work on collection and enforcement; the total cuts represent about 7 percent of the agency\u2019s workforce. More layoffs could come: Today, the Trump administration released a memo ordering all federal agencies to submit plans to\u00a0eliminate\u00a0more positions, including those of career officials with civil-service protection. The IRS\u2019s acting commissioner, Doug O\u2019Donnell,\u00a0announced\u00a0his retirement this week, and Billy Long, Donald Trump\u2019s pick to replace him, has\u00a0previously\u00a0backed legislation that would abolish the IRS.<\/p>\n

To imagine the future of a diminished IRS, look back to the 2010s. By 2017, the agency\u2019s\u00a0workforce\u00a0had shrunk by roughly 14 percent compared with 2010. The agency\u2019s audit rate\u00a0was 42 percent lower\u00a0in 2017 than in 2010. In that period, Americans saw slower refunds and delayed call times. There is a tendency to conflate efficiency with cost cutting, and sometimes leaner operations really do speed things up\u2014but if the IRS can\u2019t afford to update its arcane technology or hire skilled professionals, Vanessa Williamson, a senior fellow at Urban-Brookings Tax Policy Center, told me it may struggle to operate efficiently.<\/p>\n

In a shift of focus, the IRS has prioritized auditing wealthy people and corporations since receiving IRA funding. In 2022,\u00a0The Washington Post<\/em>\u00a0reported\u00a0that more than half of the IRS\u2019s audits in 2021 targeted taxpayers whose incomes were less than $75,000, because those audits are simpler and can be automated; auditing wealthy people\u2019s tax returns can require far more resources, especially if they have varied income streams and assets (and sophisticated lawyers or accountants). In May, former IRS Commissioner Danny Werfel\u00a0announced\u00a0that the agency would drastically ramp up its audits of wealthy corporations and people making more than $10 million. The taxes that rich people evade each year amount to\u00a0more than $150 billion, he told CNBC in 2024. Investigating them could pay off: A 2023 paper\u00a0estimated\u00a0that every dollar the agency spends on audits of wealthy people could translate to $12 in recovered funds. And those who see their peers getting audited may be discouraged from cheating on taxes in the future, Williamson noted.<\/p>\n

For generations, politicians have sought to politicize the IRS: In 1971, President Richard Nixon reportedly\u00a0said\u00a0that he wanted a new commissioner to \u201cgo after our enemies and not go after our friends,\u201d and a former Trump chief of staff\u00a0told\u00a0The New York Times<\/em><\/a>\u00a0that Trump spoke of using the IRS to investigate his rivals during his first term (Trump denied this). The agency\u2019s politicization and unpopularity was part of a \u201ccycle that I hoped we had finally broken,\u201d Natasha Sarin, a law professor at Yale and a former counselor at the Treasury, told me. When an agency struggles to perform its job well, its unpopularity makes getting more funding to improve its operations harder, and so forth.<\/p>\n

The future of a major effort to improve the tax-filing system is uncertain too. As my colleague Saahil Desai\u00a0explained\u00a0last year, the agency\u2019s pilot of a new, free tax-filing program, Direct File, was \u201ca glimpse of a world where government tech benefits millions of Americans.\u201d That the program \u201cexists at all is shocking,\u201d Saahil wrote. \u201cThat it\u2019s pretty good is borderline miraculous.\u201d Elon Musk posted earlier this month that he had \u201cdeleted\u201d 18F, the government tech initiative that helped launch Direct File (though Direct File, now under the auspices of the IRS, will\u00a0continue to accept tax returns\u00a0for now). And Treasury Secretary Scott Bessent\u00a0said, in his confirmation hearing, that Direct File would operate this year, but added that he would \u201cstudy\u201d it for future use.<\/p>\n

Staffing\u2014this year and in future filing seasons\u2014is another concern: Janet Holtzblatt, a senior fellow at the Urban-Brookings Tax Policy Center, recommended that taxpayers file as soon as possible, because the IRS workforce may only continue to diminish if some of the remaining employees leave for new jobs, which could lead to tax-refund delays. Many of those who are left are also close to retiring. Before 2022, more than 60 percent of the IRS\u2019s employees were reaching retirement age over the next six years, Holtzblatt told me. A new cohort of younger, more digitally savvy workers (many of whom were probationary agents) was gearing up to replace them. \u201cThe long-term effects are potentially worse than what might happen this year,\u201d she said.<\/p>\n

More mass layoffs and funding reductions could mean a shrunken and defanged IRS. If the agency doesn\u2019t have the resources it needs to modernize and tamp down tax evasion, revenue won\u2019t be the only thing affected\u2014Americans\u2019\u00a0already-shaky trust\u00a0in the system could be too.<\/p>\n","protected":false},"excerpt":{"rendered":"

Tax Season Just Got More Confusing. The IRS was starting to modernize\u2014then the Trump administration intervened, by\u00a0Lora Kelley (The Atlantic) Americans love to hate the IRS, that\u00a0historically unpopular\u00a0revenue-collection agency with its slow processes and fax machines and many, many forms. But recently, it has started to turn things around, at least by some measures: After […]<\/p>\n","protected":false},"author":4,"featured_media":15124,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":"","_links_to":"","_links_to_target":""},"categories":[23,192],"tags":[],"class_list":["post-15111","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-irs","category-us-social-security"],"acf":[],"_links":{"self":[{"href":"https:\/\/ustaxconsultants.es\/es\/wp-json\/wp\/v2\/posts\/15111","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/ustaxconsultants.es\/es\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/ustaxconsultants.es\/es\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/ustaxconsultants.es\/es\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/ustaxconsultants.es\/es\/wp-json\/wp\/v2\/comments?post=15111"}],"version-history":[{"count":0,"href":"https:\/\/ustaxconsultants.es\/es\/wp-json\/wp\/v2\/posts\/15111\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/ustaxconsultants.es\/es\/wp-json\/wp\/v2\/media\/15124"}],"wp:attachment":[{"href":"https:\/\/ustaxconsultants.es\/es\/wp-json\/wp\/v2\/media?parent=15111"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ustaxconsultants.es\/es\/wp-json\/wp\/v2\/categories?post=15111"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ustaxconsultants.es\/es\/wp-json\/wp\/v2\/tags?post=15111"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}