You might have hear derogatory terms to refer to the IRS agents or to the entity in general, like “in my audit, I just threw them a bone to leave me away”. However, this is nothing farther from the truth as in the recent years, the funding has been increased and the IRS employees has been growing as we reported in our previous post from October 7th titled IRS Budget and Workforce for 2023 – Relevant data that you should know
Also, since the beginning of the year, the IRS has been working on several initiatives focusing more on higher income individuals defined as over a million in income and over $250k in recognized tax debt, larger partnership returns (over $10m in assets in the balance sheet) – looking for discrepancies in basis, using Artificial Intelligence (AI) to audit multi billion partnerships (this tool might be extended to smaller entities if providing good results), etc.
If you think the IRS is not up to date or cannot deal with complex issues, then, you are completely wrong. Back in 2021, the IRS was able to seize over $3 billion dollars in cryptocurrency tracing back around fifty thousand bitcoins. The case is quite complex to provide all the details of the operation, but you can read the comprehensive IRS press release in the link below.
Do not underestimate the IRS and other tax authorities as they have the funds, the talent, the tools and almost unlimited resources for any audit or examination. We recommend to individuals and business owners to stay out of trouble as prevention is the best tool avoiding extremely aggressive practices or unreasonable position as described in section 6694(a)(2) of the Internal Revenue Code. Do not hesitate to contact us for professional guidance.