Expert warns small and midsize businesses will be affected by IRS audits.

The Truth About Biden’s Tax Audit Promises

The Biden administration has promised that households and businesses making less than $400,000 per year will not face expanded tax audits. However, according to testimony before the Senate Finance Committee, this promise only applies to “total positive” income without losses.

What You Need to Know

• The IRS plans to assess income without accounting for losses, which could impact small to midsize businesses with adjusted gross income under $400,000.
• The IRS was given $80 billion as part of the Inflation Reduction Act, which is roughly six times the agency’s 2022 budget.
• The IRS is not always correct in its enforcement actions, with a 48% success rate in tax court cases over the last five years.

Even if an audit results in no additional taxes due, taxpayers can still spend countless hours and incur significant costs. It’s important to stay informed and prepared for any potential audits or enforcement actions.