The tax hikes on wealthy Americans included in President Biden’s economic recovery plan last spring have been a battleground for bipartisan debate for most of 2021. Now, the Senate Republicans have pushed aside the administration's proposal to increase funding for the Internal Revenue Service, for the moment. We will take a closer look at the proposed IRS funding, the reasons it is necessary, and how the same wealthy Americans could end up the most impacted by the proposal.
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Intentionally Filing a Defective Tax Return
Creativity on a tax return is a natural tendency. Many strategies and behaviors we know are wrong, e.g. not reporting all income. However, is it ever okay to disregard some deductions and pay more tax? At first glance, it would seem that the IRS should like the idea of more reported income and a higher tax liability attached to the additional income. The IRS does not.