The 2022 Inflation Reduction Act: How Will It Impact You If You Owe Money to the IRS?

by | Oct 10, 2022 | Law

Working with the IRS has never been easy, and tax settlement agreements are always complicated affairs. If you are currently working to pay off your tax debt, you may wonder what the recently passed ‘Inflation Reduction Act of 2022’ has in store for you. 

There has been a lot of back and forth about the Inflation Reduction Act and what it means to you. While the agreement details are still up in the air, you need to know a few concrete details about how this act could impact you as an American citizen. So here are some essential things to consider moving forward. 

The “Army” of IRS Agents Are Not All Soldiers 

A lot has been said of the supposed army of IRS agents who will soon be walking throughout the streets of America. Some pundits and politicians say, “the IRS will be hiring 87,000 armed agents to hunt  down innocent taxpayers, relieving them of their hard-earned money in  escalating waves of harassment.” 

The reality behind the army of IRS agents is much different and far less troubling than what you may be hearing. Most new hires will be administrative personnel, IT workers bent on upgrading old hardware, customer service representatives to answer the endlessly ringing phones,  and so on. Of course, that does not mean there will not be new agents on the job, but the scope of the new hires is not a reason to panic, even if you currently owe money to the IRS. 

Enforcement Efforts Will Ramp Up 

Even though only a portion of those new IRS hires will be “on-the-ground agents,” the overall goal of this bill for the IRS is to increase the amount of revenue they are collecting from taxpayers. There is reason to believe that the IRS will be more aggressive with its collection efforts because of the  Inflation Reduction Act. 

The nature of this bill has raised concerns that the IRS will have an increase in audits for small business owners and regular taxpaying citizens across the United States. Our government claims the IRS’s efforts are geared more toward citizens in higher tax brackets; however, you can never be too sure since it does not clearly state that they will not target the “everyday”  taxpayer. Therefore, if you think you owe money to the IRS, this is the time to take it seriously to avoid any extra fees or, worst-case scenario, the IRS freezing any of your bank accounts and garnishing your wages. 

If You Have an Agreement in Place, Nothing Should Change

The IRS has been increasing its efforts against taxpayers even before passing the ‘Inflation Reduction Act of 2022‘. If you have been targeted by one of these actions, they are still looking for a suitable settlement with you. They will not stop until the settlement is resolved.

Hopefully, you are working with a professional as you work with the IRS  since the settlement process can get pretty complicated. Working with a  tax relief specialist ensures you can get the lowest settlement possible for your situation under the law.  

If you are still working through the details of a settlement, you could find the IRS will try to drive a harder bargain. This could be especially true if the amount owed is over $10,000. Either way, working with a tax resolution professional is crucial since ignoring the situation will only worsen it. The longer you wait, the more expensive your situation will become. 

To read about the Levy notice of the IRS click here:

Professional Tax Relief Guidance is More Important Than Ever

The recent passage of the Inflation Reduction Act has introduced a great deal of uncertainty among taxpayers, especially those who owe money to the IRS. If you are not currently working with a professional and relying on their guidance, seeking outside help will become even more critical. It is vital to work with a professional, so do yourself and your wallet a favor by connecting with a tax resolution specialist like COTTS LAW. We specialize in helping people get their IRS and State tax problems settled and behind them once and for all! Click Here to get professional tax relief today!

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About Daniel T.A. Cotts

Daniel is a skilled Tax Attorney who moved to Corpus Christi in 2019 to expand his practice and return to Texas. With over 26 years of experience in the legal profession, Daniel brings a wealth of knowledge of Taxation, IRS Dispute representation & resolution, Estate Planning, Accounting, and Business & Contract Law to South Texas.

 

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