Tax Audits

[Sanyatti]

Tax audits Average taxpayers "should not be worried" about more audits, the IRS said Thursday, after some GOP lawmakers expressed concerns about how it will utilize a new $80 billion investment. The funding comes from Democrats' sweeping Inflation Reduction Act, which passed along party lines last year and is meant to support the agency in cracking down on tax cheats and providing better service to taxpayers. As a result of the improvements, the IRS is expected to collect more than $100 billion in new revenue over a 10-year period. But Republicans have been critical of sending so much money to the IRS and have said that the investment could lead to increased audits of hard-working Americans. Separately, for those who may still need to complete their taxes, the deadline this year falls on April 18 2023 There are several ways that the rich can pay less tax in the USA. Some of the most common methods include: Taking advantage of tax deductions: The wealthy can take advantage of various tax deductions to reduce their taxable income. For example, they can deduct charitable contributions, mortgage interest, and business expenses. Capital gains tax: The wealthy can also take advantage of the lower capital gains tax rate. Capital gains are profits made from the sale of assets such as stocks, bonds, or real estate. The current maximum long-term capital gains tax rate is 20%, which is lower than the top ordinary income tax rate of 37%. Offshore tax havens: Some wealthy individuals and corporations use offshore tax havens to avoid paying taxes in the US. By keeping their money in countries with low or no taxes, they can avoid paying US taxes on that income. Trusts and estate planning: The wealthy can also use trusts and estate planning to minimize their tax liability. For example, they can transfer assets to a trust, which can then pass them on to heirs without incurring estate taxes. Lobbying for tax breaks: The wealthy can use their wealth and influence to lobby for tax breaks and loopholes that benefit them. They can hire lobbyists, donate to political campaigns, and use their connections to sway lawmakers in their favor. It's important to note that not all wealthy individuals or corporations engage in these practices, and some may pay a higher percentage of their income in taxes than others. However, these methods are commonly used by some of the wealthiest individuals and corporations in the US to reduce their tax liability.