POLITICS & GOVERNMENT

Why Chaos at the IRS Spells New Work for Tax Professionals

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The three key IRS tools every pro must learn today.

By Eric L. Green, LLM

Between all of the back-and-forth between DOGE and the IRS, not to mention travel and credit line reductions, it raises questions about what exactly the fate of the IRS will be.

MORE: The IRS Tidal Wave Is Here | S Corp Clients Beware | Four Ways to Handle Federal Tax Liens | The IRS Is Coming! Get Your Clients into Compliance | Tax Chat: Eric Green Reveals The Tax Rep Guide to Tax Season | What I Wish Clients Knew about Tax Liens | Tax: Explaining the Bad News about Canceled Debt to Clients | Offers in Compromise Aren’t for Everyone
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In fact, the latest announcement is to cut the IRS by 50 percent by the end of 2025. So, if you are wondering just what the heck the game plan is, you are not alone. After speaking with close colleagues inside the IRS, I can say it is basically chaos at the moment.

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Gaps Galore at the IRS

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stressed businessman, heads on hands

Some of the fixes are simple.

By CPA Trendlines Research

The word “gap” occurs 28 times in the National Taxpayers Advocate’s 2024 Annual Report to Congress. The report highlights a wide and crippling assortment of gaps in America’s favorite tax agency.

  • A tax gap
  • A salary gap

MORE: Is Voluntary Disclosure of Tax Noncompliance Working? | IRS Needs to Work Better with Its Workers | Why ITIN Applications Get Delayed | The Ouches of the Tax ‘Practitioner’ Scam | Could the IRS Do Better with the Phones? | IRS Sluggish on Identity Theft | Tax Preparers Share Advice for Your Clients | Check These 41 Items on Business Tax Returns | IRS Must Speed Up Tax Return Processing | First Tax Filing Reports Are In | Cut Down Your Tax Work in Progress | More Than 1 Million ERC Claims Still Not Processed
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  • A tax pro oversight gap
  • A hiring data gap

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Is Voluntary Disclosure of Tax Noncompliance Working?

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Maybe a better question: Is the IRS trying to make it not work?

By CPA Trendlines Research

For more than two decades, the IRS has been allowing tax dodgers to admit their delinquency and pay their back taxes, interest and penalties without fear of criminal prosecution. Reaping the revenues was preferred over locking people up.

But times have changed.

MORE: IRS Needs to Work Better with Its Workers | Why ITIN Applications Get Delayed | The Ouches of the Tax ‘Practitioner’ Scam | Could the IRS Do Better with the Phones? | IRS Sluggish on Identity Theft | Tax Preparers Share Advice for Your Clients | Check These 41 Items on Business Tax Returns | IRS Must Speed Up Tax Return Processing | First Tax Filing Reports Are In | Cut Down Your Tax Work in Progress | Steve Yoss: Unlocking Business Insight with Power BIs | Quick Tax Tip | More Than 1 Million ERC Claims Still Not Processed | Art Werner: The Godfather and Tax Issues | Quick Tax Tip
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This act of grace is called the Voluntary Disclosure Practice (VDP). The purpose is to induce the intentionally noncompliant to come forth with what they owe and come back into the fold of patriots who support their nation. In essence, the VDP is an escape hatch out of the crime of tax evasion.
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IRS Needs to Work Better with Its Workers

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pie chart

 

Training? Inadequate. Best recruitment method? Who knows?

By CPA Trendlines Research

Here’s an idea: ditch your CPA practice and go work for the IRS.

If you can figure out the job application process, you’ve already proven yourself adept at bureaucracy.

MORE: Why ITIN Applications Get Delayed | The Ouches of the Tax ‘Practitioner’ Scam | Could the IRS Do Better with the Phones? | IRS Sluggish on Identity Theft | Tax Preparers Share Advice for Your Clients | Check These 41 Items on Business Tax Returns | IRS Must Speed Up Tax Return Processing | First Tax Filing Reports Are In | Cut Down Your Tax Work in Progress | Steve Yoss: Unlocking Business Insight with Power BIs | Quick Tax Tip | More Than 1 Million ERC Claims Still Not Processed | Art Werner: The Godfather and Tax Issues | Quick Tax Tip | Advanced Tax Preparers Need Managing, Too | The Top Ten Problems the IRS Still Needs to Fix
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Despite that preliminary qualification, you’ll have to take a pay cut of 20-30 percent, but in as little as three years, they’ll have you trained for your job.

And with a little luck, you won’t have a boss, given that a quarter of all director positions are vacant or temporarily filled.
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Why ITIN Applications Get Delayed

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bar chart

… and why they don’t have to.

By CPA Trendlines Research

Every year, more than a million taxpayers apply for an Individual Taxpayer Identification Number. These are people who, for various reasons, can’t get a Social Security number. These include

  • resident aliens with a “green card.”
  • foreign students who are allowed to earn a certain amount.
  • people in foreign countries who are required to pay U.S. taxes.
  • non-American spouses and other dependents of primary taxpayers who have SSNs.

MORE: The Ouches of the Tax ‘Practitioner’ Scam | Could the IRS Do Better with the Phones? | IRS Sluggish on Identity Theft | Tax Preparers Share Advice for Your Clients | IRS Must Speed Up Tax Return Processing | First Tax Filing Reports Are In | Cut Down Your Tax Work in Progress | Steve Yoss: Unlocking Business Insight with Power BIs | Quick Tax Tip | More Than 1 Million ERC Claims Still Not Processed | The Top Ten Problems the IRS Still Needs to Fix | Tax Pros Gear Up for a Better Busy Season | IRS Processing Up; Payouts Down
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Delays and Disaster

The ITIN application process is an invitation for fraud, so the IRS is very careful in receiving and approving applications.
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