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The Tax Man Cometh! And Not Just for Billionaires

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The tax man cometh!

And thanks to the Democrats in Congress, there will be more tax enforcers shining their lights into the nooks and crannies of Americans’ finances.

The recently passed and euphemistically named “Inflation Reduction Act” included nearly $80 billion for the IRS over the next 10 years. That could fund the addition of 87,000 employees, making it one of the biggest agencies in the federal government.

This photo puts that into perspective.

The Democrats would like you to believe this funding will be used to go after billionaires who are bilking the system. But there are less than 750 billionaires in the US. That can only mean one thing — the tax collector is coming for you.

Historically, the audit burden has fallen on low-income tax filers. Digest this tidbit from CNBC.

Overall, IRS audits plunged by 44% between fiscal years 2015 and 2019, according to a 2021 Treasury Inspector General for Tax Administration report. While audits dropped by 75% for Americans making $1 million or more, the percentage fell by 33% for low-to-moderate income filers claiming the earned income tax credit, known as EITC, the report found.”

Looking at data from 2016 tax returns, the audit rate for people reporting an adjusted gross income of $1-$25,000 was nearly double every other income bracket.

As with most things government, the burden falls disproportionately on the poor and middle class.

IRS apologists tell us that if we’re not “cheating” on our taxes, we have nothing to worry about. But that isn’t true. With the complexity of tax law, it’s nearly impossible not to run afoul of the IRS if you have an even remotely complex return. There was once an experiment where the researcher took a complex scenario and gave it to 50 tax preparers and an IRS auditor. They got 50 different returns and none of them matched that auditors.

And if you forget to include that $601 in Venmo transfers, well, watch out!

Here’s some good news on the tax front.

You can avoid IRS reporting requirements on precious metals, even on large-scale purchases. You just have to know the rules. SchiffGold’s Guide to Tax-Free Gold and Silver Buying provides the information you need to navigate the complex world of IRS reporting. You can download it free RIGHT HERE.

Tax Free Gold and Silver Buying Free Report

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About The Author

Michael Maharrey is the managing editor of the SchiffGold blog, and the host of the Friday Gold Wrap Podcast and It's Your Dime interview series.
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