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An ongoing series of informational entries

What You Need to Know About the IRS Hiring Surge

March 2020

More than 150 million Americans are expected to file individual tax returns for the 2019 tax year before the traditional April 15 deadline, and this year, it’s more important than ever to work with a professional tax preparer to make sure your taxes are done correctly and accurately.

The Internal Revenue Service (IRS) hired nearly 10,000 people in 2019 with plans to hire an additional 5,000 workers, according to a November 2019 Forbes https://www.forbes.com/sites/kellyphillipserb/2019/11/25/irs-new-hire-numbers-are-going-up/#2381d22f3b6c article.

In the article, IRS Commissioner Charles Rettig is quoted saying staffing has been made a priority and that the hiring surge will help “balance enforcement and service” and enhance taxpayers’ relationship and interactions with the IRS.

A larger workforce will enable the IRS to better concentrate on things like:

• Employment Tax Evasion

One major area of focus for the IRS and the Department of Justice will be payroll tax dodgers. Businesses that use withheld funds from employee paychecks, like Social Security and Medicare, for personal expenses or to pay other debts instead of remitting the money to the IRS may be subject to extra scrutiny.

• Taxpayers with unresolved payroll tax issues

The IRS will be paying extra attention to businesses with large outstanding payroll tax withholdings not sent to the IRS. After unsuccessful attempts to reach businesses by mail, agency collectors are planning to show up in-person without warning to resolve the payroll tax issue.

• Cryptocurrency

The IRS is cracking down on individuals who they believe have unreported income from digital currencies, like bitcoin. Examiners are mailing letters to individuals thought to have accounts and IRS agents will work on cryptocurrency-related audits.

One final important reminder—if you own a corporation, always keep your personal and business expenses separate. In addition to saving you unnecessary stress at tax time, comingling funds and not having a separate expense record can raise red flags on both your individual and business tax returns. Having separate bank accounts and credit cards is a great way to keep the expenses separate.