{"id":1498510,"date":"2024-10-25T13:30:00","date_gmt":"2024-10-25T17:30:00","guid":{"rendered":"https:\/\/bugaluu.com\/news\/?p=1498510"},"modified":"2024-10-25T13:30:00","modified_gmt":"2024-10-25T17:30:00","slug":"new-irs-unit-begins-targeting-pass-through-businesses","status":"publish","type":"post","link":"https:\/\/bugaluu.com\/news\/new-irs-unit-begins-targeting-pass-through-businesses\/1498510\/","title":{"rendered":"New IRS Unit Begins Targeting Pass-Through Businesses"},"content":{"rendered":"

New IRS Unit Begins Targeting Pass-Through Businesses<\/span><\/p>\n

\n

Authored by Naveen Athrappully via The Epoch Times<\/a> (emphasis ours),<\/em><\/p>\n

The IRS has officially launched a new unit that it states will \u201cmore efficiently conduct audits\u201d of entities known as pass-through businesses.<\/p>\n

The initiative targets businesses that pay no taxes<\/a> on their revenue.\u00a0Instead, the income generated is passed on to owners who then file taxes based on their individual taxation rates.<\/strong> Pass-through businesses include sole proprietorships, partnerships, limited liability companies, and S-corporations. [Which the Bidens used<\/a> to avoid up to $500k in taxes]<\/p>\n

People walking near the IRS building in Washington on Jan. 4, 2024. Madalina Vasiliu\/The Epoch Times<\/em><\/a><\/p>\n

In September, the IRS stated<\/a> that it is establishing a unit within the agency\u2019s Large Business and International (LB&I) division focusing on large or complex pass-through entities.<\/strong><\/p>\n

On Oct. 22, the agency announced<\/a> that the unit \u201chas officially started work.\u201d<\/p>\n

The new department will seek to ensure compliance from pass-through entities of every size and form, including S-corporations, partnerships, and trusts. The agency stated<\/a> that these businesses are being used to evade taxes.<\/strong><\/p>\n

\u201cThe establishment of pass-through field operations is a significant step in our goal to increase fairness in enforcement while improving service<\/strong>,\u201d IRS Commissioner Danny Werfel said.<\/p>\n

\u201cBy using Inflation Reduction Act funding and enhancing our expertise in this area, we will be able to reverse our historically low audit rates for complex arrangements employed by certain high-wealth individuals and large entities.\u201d<\/strong><\/p>\n

Pass-through examinations had been divided between two IRS divisions\u2014LB&I and the Small Business\/Self-Employed. The cases were assigned on the basis of entity size.<\/p>\n

Revenue agents from the new pass-through unit will be grouped into teams based on geography. They will be tasked with primary examination of returns related to pass-through businesses.<\/p>\n

While the IRS claims that funds from the Inflation Reduction Act will be used to go after high-income groups, it earlier admitted<\/a> that lower-income groups could be targeted if there was a funding crunch.<\/p>\n

In such a situation, the agency will be forced to cut down enforcement staff by more than 50 percent in fiscal year 2030, the IRS stated in May. This would \u201cseverely\u201d affect the agency\u2019s ability to carry out complex audits.<\/p>\n

\u201cSince lower-income taxpayers are more likely to have simple tax returns, this lack of funding will likely translate into a higher share of audits falling on low- and middle-income taxpayers, while examination coverage rates for high-income and large corporate taxpayers will severely decline,\u201d the agency stated.<\/p>\n

Pass-Through Deductions<\/h2>\n

The IRS unit targeting pass-through entities has been set up just as a key tax deduction available to these businesses has come under threat.<\/p>\n

In 2017, President Donald Trump signed into law certain tax cuts, including a provision that allows pass-through entity owners to deduct 20 percent of their qualified business income when calculating taxes. <\/strong>The law is set to end in 2025.<\/p>\n

That deduction has generated some criticism. A report<\/a> by the left-leaning Center for American Progress concluded that the measure has \u201cdisproportionately benefited the wealthy and has encouraged businesses to game the tax code to maximize qualifying income.\u201d<\/p>\n

More than half of all pass-through deductions in 2021 were claimed by tax filers with adjusted gross incomes (AGI) of $500,000 or more, according to the report.<\/strong><\/p>\n

\u201cMoreover, wealthy filers claimed substantially larger average deductions\u2014$1,024,246 for those with AGI of $10 million or more. By contrast, filers with AGI below $100,000 with the deduction\u2014who accounted for 51 percent of claimants\u2014claimed, on average, $1,997,\u201d the organization stated.<\/p>\n

The U.S. Chamber of Commerce is arguing for retaining the tax deduction. It points out that Congress permanently reduced the tax rate on corporate income from 35 percent to 21 percent in 2017<\/strong>, according to a Feb. 14 statement<\/a>.<\/p>\n

The 20 percent deduction for pass-through entities was enacted to ensure that these businesses \u201cweren\u2019t put at a tax disadvantage\u201d against corporations, the chamber stated.<\/p>\n

Making this deduction available only to business owners with less than $500,000 in annual income will \u201cresult in a tax increase on one of the major sources of jobs in our nation, directly hurting workers and the economy,\u201d it stated.<\/strong><\/p>\n

The chamber urged Congress to make the 20 percent deduction permanent for pass-throughs.<\/p>\n<\/div>\n

Tyler Durden<\/a><\/span>
\nFri, 10\/25\/2024 – 09:30<\/span><\/p>\n

\u200bhttps:\/\/www.zerohedge.com\/political\/new-irs-unit-begins-targeting-pass-through-businesses<\/a>\u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"

New IRS Unit Begins Targeting Pass-Through Businesses Authored by Naveen Athrappully via The Epoch Times (emphasis ours), The IRS has officially launched a new unit…<\/p>\n","protected":false},"author":0,"featured_media":1498511,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_post_was_ever_published":false},"categories":[1],"tags":[],"class_list":["post-1498510","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","wpcat-1-id"],"jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/pbimBl-6hPw","jetpack_featured_media_url":"https:\/\/bugaluu.com\/news\/wp-content\/uploads\/sites\/3\/2024\/10\/image2851629_0-9ssuZa.jpeg","_links":{"self":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts\/1498510","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/comments?post=1498510"}],"version-history":[{"count":0,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts\/1498510\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/media\/1498511"}],"wp:attachment":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/media?parent=1498510"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/categories?post=1498510"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/tags?post=1498510"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}