The sequester has reared its ugly head at the IRS. The Budget Control Act of 2011will affect the IRS beginning on March 1, 2013. The areas that will be immediately affected will be Whistleblower payments and payments to tax-exempt employers of the refundable portion of the small-employer health insurance expense credit, which will be reduced by 8.7 percent, just to name a few.
Acting Commissioner Steven Miller, last week announced that cuts will require the IRS to force its employees to take unpaid furloughs, but was adamant that these furloughs would not affect the filing season, which is in full swing. Beginning this summer, each employee of the IRS will be subject to five to seven furlough days through the end of the government’s fiscal year which ends September 30th. These furloughs would affect all employees and would amount to no more than one furlough day per pay period. Additional measures for the IRS to cut spending will come in the form of a hiring freeze, reduced funding for grants and other expenditures; and cutting costs for travel, training, facilities and supplies.
The Office of Management and Budget reports that an additional $3 million reduction in spending by the Tax Court, $6 million in cuts to salaries and expenses in the Treasury Department’s Financial Crimes Enforcement Network, and $8 million in cuts to the Treasury Inspector General for Tax Administration budget.
The sequestration will also result in a $187 million reduction to grants for specified energy property in lieu of tax credits that were enacted in the Tax Relief, Unemployment Insurance Reauthorization, and Jobs Creation Act of 2010. These credits were extended by the American Recovery and Reinvestment Act of 2009.
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If you have any questions you can email Craig W. Smalley E.A.
Author of the books: It Starts With an Idea – Tax Tips for Small Businesses, The Ultimate Real Estate Investor Tax Guide, The Complete Guide to the New Tax Law – American Taxpayer Relief Act of 2012, Everything You Wanted to Know about the IRS – Audits, Appeals and Collections, Tax Avoidance is Legal! The Complete Guide to Individual Income Tax, The Complete Guide to the Affordable Care Act’s Tax Provisions, The Complete Guide to Retirement Plans for Small Businesses, The Complete Guide to Estate, Gift and Trust Taxation, The Complete Guide to Hiring an Accountant, The Complete Guide to Subchapter S-Corporations,, and Free Money. All available exclusively on Kindle
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