Tax Pros Don’t Need to Sweat the IRS Budget Cuts

This is the first post from our slew of freelancer candidates. The following is by Jeremy Woodward.

The House Appropriations Committee has settled on an IRS budget, and it’s not good news for everyone’s favorite group of suits and ties. The $11.8 billion allocation is $1.2 billion below what they requested. Probably not enough for a Tea Party Ball, but I’m pretty sure Grover Norquist jumped and clicked his heels upon hearing the news (image unavailable outside my head).
What does that mean for the lowly tax preparer? Probably nothing. I spent 25 minutes on hold with the IRS the other day to ask a simple question, only to be transferred to the ‘proper department’ and wait another 20. A 10% decrease in service would be, what, 4.5 minutes? What’s an extra 4.5 minutes in the ‘Waiting on IRS’ code in the grand scheme of things? It’s still better than the friendly message from the Colorado Department of Revenue, happily explaining after going through the whole menu list that, to ensure I get proper treatment, they’re going to hang up on me until they’re less busy.
IRS Commissioner Shulman offered his own grim predictions back in October of last year, claiming that “budget cuts will result in a direct increase to the nation’s debt.” I’m still not sure if that was intended as a warning or a threat, but I guess we’ll find out soon enough.
And honestly, Shulman, why would enforcement change? I’m pretty sure the IRS’s main tactic is denying tax credits unless the company provides enough documentation to make the nearest forest sweat. How much money does it really cost the IRS to send a letter saying, “You won’t get an R&D credit unless you give us your firstborn* child”? 
This would have been less of a problem if the IRS had just waited on their budget before issuing those new repair regs. Now they have more work and less money. I’d probably start making threats, too.
So the next time you make it through the IRS hold music and Mr. Anderson, agent number #102934852374 sounds less than chipper, you’ll know why. Tell him if he audits one of your clients in the near future you’ll give him an under-the-table candy bar. Just don’t give him any identifying information in case he confuses kindness with bribes.
*Firstborn children make for inexpensive agents.

Latest Accounting Jobs--Apply Now:

Have something to add to this story? Give us a shout by email, Twitter, or text/call the tipline at 202-505-8885. As always, all tips are anonymous.

Comments are closed.

Related articles

CPA Firms That Referred Clients to Alliantgroup Have Been Subpoenaed, Asked to Turn Over 11 Years of Client Data

On May 20 the Houston headquarters of R&D tax credit consulting firm Alliantgroup was raided by the IRS, in the weeks since we’ve had plenty of speculation about the whys and we’ve heard countless accounts from current and former Alliantgroup employees about the “evil, toxic, and emotionally damaging company” that employed them. We’ve now learned […]

a man with binoculars

Big 4 Conflicts of Interest Are in Regulators’ Crosshairs, EY Tops the Independence Naughty List

There’s a story in the New York Times today about how EY “devised an elaborate arrangement” for nonprescription drugmaker Perrigo to avoid more than $100 million in taxes, an arrangement that was questioned by Perrigo’s then-auditor BDO. Perrigo did what any reasonable tax-avoiding nonprescription drugmaker would do and dropped BDO for EY, hence totally resolving […]