Business Frame Weekly - $80 Billion IRS Funding Bill Reintroduced / IRS Issues 12 Million Refunds / Audits Drop Slightly in 2022

The Family and Small Business Taxpayer Protection Act was reintroduced on Monday in order to rescind the extra $80 billion funding for the IRS under the Inflation Reduction Act.

According to a news release by the IRS, nearly 12 million refunds were issued to taxpayers who had overpaid their taxes due to the inclusion of an unemployment compensation exclusion in the American Rescue Plan Act of 2021.

The Transactional Records Access Clearinghouse (TRAC) at Syracuse University reported on Jan. 4 that out of 164 million individual income tax returns filed with the IRS last year, around 626,000 were audited, slightly down from 659,000 during fiscal year 2021.

In this newsletter:

• House Republicans Reintroduce Bill to Rescind IRS Funding
• Unemployment Compensation Exclusion Corrections Led to 12 Million Refunds
• IRS Audits Dropped Slightly in 2022
• NY Fed Survey Finds Reduced Near-Term Inflation Expectations in December
• Financial Accounting Foundation Seeks Nominations for Private Company Council Chair and Members

January 10, 2023

House Republicans Reintroduce Bill to Rescind IRS Funding

Republicans plan to vote as soon as Monday on rescinding the extra $80 billion provided for the IRS under the Inflation Reduction Act that Democrats passed last year — after picking a new leader of the tax-writing Ways and Means Committee. A group of GOP members reintroduced the Family and Small Business Taxpayer Protection Act on Monday. Democrats have contended the extra $80 billion allocated to the IRS over the next 10 years will be used for improving taxpayer service, but Republicans have warned the funds will be used to hire tens of thousands of IRS agents to audit middle-class taxpayers and smaller businesses.

Unemployment Compensation Exclusion Corrections Led to 12 Million Refunds

The IRS said Friday in a news release that it has completed the final corrections for taxpayers who had overpaid their taxes due to the inclusion of an unemployment compensation exclusion in the American Rescue Plan Act of 2021 (ARPA), P.L. 117-2, after the taxpayers had filed their tax returns. The IRS reviewed the Forms 1040, U.S. Individual Income Tax Return, and 1040-SR, U.S. Tax Return for Seniors, filed before ARPA was enacted to identify taxpayers who were eligible for the correction. About 14 million returns were corrected, with nearly 12 million refunds — totaling $14.8 billion — issued. The average refund was $1,232.

IRS Audits Dropped Slightly in 2022

Of the more than 164 million individual income tax returns filed with the IRS last year, only 626,204 were audited—down from 659,003 during fiscal year 2021, according to a report released on Jan. 4 by the Transactional Records Access Clearinghouse (TRAC) at Syracuse University.

NY Fed Survey Finds Reduced Near-Term Inflation Expectations in December

U.S. households see weaker near-term inflation and are expecting notably less spending, even as they foresee their incomes continuing to rise, the New York Federal Reserve said Monday in its December Survey of Consumer Expectations. The bank reported that respondents to its monthly survey said they see inflation a year from now at 5%, from 5.2% in November, for the lowest reading since July 2021. Respondents to the survey had discordant expectations about their outlooks for income and spending. In December, they saw future expected household income gains of 4.6%, up a touch from the month before, for the highest reading in the survey’s history. But expected spending tumbled, falling from November’s 6.9% expected rise to 5.9% in December.

Financial Accounting Foundation Seeks Nominations for Private Company Council Chair and Members

The Board of the Financial Accounting Foundation (FAF) announced it is seeking nominations for a new chair, as well as several new members of the Private Company Council (PCC). The PCC advises the Financial Accounting Standards Board (FASB). New member terms will be for three years beginning January 1, 2024. All nominations must be received by the close of business on February 10, 2023.

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