With the new tax season almost here, the citizens of Georgia should get ready and take the time to make sure that all their financial matters are in order. However, it is also worth noting that this year should be a particularly strenuous year for the IRS. On the one hand, the government shutdown has left this agency severely understaffed, where almost 90 percent of the employees have not shown up to work at some point during the past 25 days. On the other hand, there are new tax laws that are scheduled to go into effect this year, meaning that the agency has to deal with one of the largest changes in the tax code while being severely understaffed.
The new tax system affects both individuals and businesses. On the individual level, the tax system not only changes the tax brackets but also expands the child tax credit while limiting numerous niche breaks to the point of eliminating some of them. On the business level, the tax system allows pass-through businesses to receive a deduction of 20 percent on a portion of their income; however, a business has to follow a few convoluted rules in order to know whether it qualifies for this deduction. Additionally, multinational corporations were affected by this tax overhaul.
Fortunately, the IRS has a plan to meet the new season. For starters, the agency has a contingency plan that will allow it to bring in more than half of its 80,000 employees into work. Additionally, several of the call sites that had been closed during the shutdown will be re-opened. Also, the IRS’s computers will be working around the clock to spot fraudulent returns. Yet, non-automated returns are going to stall a bit.
Even though the IRS has a plan in action, it is bound to run into a few hiccups along the way. For instance, the agency will have a hard time offering good customer service or answering the numerous questions that are bound to be thrown its way. Therefore, anyone unclear about what the new tax code means for them might benefit from reaching out to an experienced attorney who can fill them in.
Source: Bloomberg, “Tax Season Could Be ‘Ugly’ With IRS Running at Only 57% of Staff,” Laura Davison, January 15, 2019