Tax laws

If you earn more than $100,000, audit risk doubles as tax laws change, including reporting $600 via cash applications to the IRS

The IRS has been in the news a lot lately as it drastically changes tax laws and audits high income earners over $100,000. This is happening despite the backlog of millions of unprocessed tax returns.

In recent news, things like the declaration of payments worth $600 or the agency’s destruction of 30 million paper documents have shocked Americans.

Now, if you make over $100,000 a year, you have one more thing to worry about.

IRS plans to make it a point to check high earners

The IRS recently announced that it will make a point of auditing higher income earners more.

If you win over $100,000, your chances of being audited have now doubled, according to CBS News.

For the past ten years, the IRS has not attempted to audit high earners as aggressively as they now expect.

Without staff and funding, it has been more difficult to audit these taxpayers.

Now the audit rate has doubled between last September and May.

Those earning $100,000 to $500,000 have seen the rate of audits increase by 0.6% since 2019.

The agency made other changes to the laws, including flagging payments made through cash payment apps such as Venmo.

This means that any amount totaling $600 or more must be reported to the IRS by law, according to Marca.

This is a major change from previous law which required payments over $20,000 or more than 200 transactions to be reported.

The law requires that any payment made using goods and services be reported with a 1099-K.

A form will be sent to both the taxpayer and the IRS.

The new law came into force on January 1, 2022.

There is always the option to choose friends and family if it is necessary to pay or give money to a family member or friend.

The IRS spends so much time on laws and changes, but millions are still waiting for 2020 tax refunds

The IRS currently has a backlog of 9.8 million tax returns that still need to be processed, many of which are from 2020.

Reporting by WSB-TV Atlanta that a Cobb County woman is still waiting for her 2020 return to be processed.

It’s been 32 weeks in all and she’s still waiting for her 2020 amended return to be completed.

Originally, they owed money and continued to receive bills.

Now, with interest owed, they are owed $2,000 after they owed $2,000 which was increased to $3,000.