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Why the Inflation Reduction Act of 2022 Should Worry You

You’ll have to journey with me a bit, before you see that this post is not quite what it seems. . .

No, Internal Revenue Service (IRS) will not be hiring 87,000 special agents. I’ve written about this in several places (beyond this blog), because I cannot stand sensationalism. It’s an abundance of emotion and an absence of sound, factual research that makes me shake my head in disappointment. I usually point to it as a failing of the US education system, but it is often information spread by “learned” people that are experts at exploiting the vulnerabilities of others (including the lack of critical thinking displayed by many) behind the outrage and fallacies being shared. I explained all about the misinformation regarding IRS hiring over on LinkedIn, but I’ll share a copy of that text below, as well.

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As written August 11:

In July, I posted on my blog that the Inflation Reduction Act, if passed, would allocate $124 billion for IRS tax enforcement. I also stated that this meant more IRS collection jobs would be announced. These jobs would be revenue agents and officers, auditors and specialists, etc.,.

Imagine my surprise when today, I saw the rumors of 87,000 SPECIAL agents being added to IRS. I laughed immediately, because I know the difference between a special agent and a revenue agent, and I also chuckled because I knew that there was NO WAY that IRS would double their workforce by hiring special agents exclusively. Special agents do not consistently collect enough money for IRS – with a current staff of 82,000 – to bring on a group SPECIAL agents than exceed the number of staff they have currently.

There is a difference between revenue agents and special agents. Revenue agents are auditors and unarmed. They do the bulk of the audits conducted by IRS. Special agents are law enforcement, just like FBI and CIA agents. FBI special agents have strikingly similar job duties. IRS’s special agents are armed, because they go to FLETC in Georgia. No official sources have confirmed this 87k hiring boom, and several sources indicate that this is a rumor at best. This rumor came from a poorly comprehended report and a desire to sensationalize a hot topic that few people actually understand.

But, I’ll play along and pretend the 87k hiring rumor is true. Assuming that IRS does hire 87k ppl, I assure you that the majority of those ppl will be tax specialists, revenue officers and revenue agents, not special agents, who really don’t generate revenue consistently enough to justify this type of hiring push.

Please continue to read, read, read, and use your power of discernment. Don’t go by what one source says (even if the source is this post!) If I’m wrong, then I’ll personally put up another post admitting it. But I’m pretty sure I’m not. I just want you all to continue to be wise, be alert, and watch out for those that monetize and exploit your outrage.

I wrote a detailed post in late July about the potential impact of the Inflation Reduction Act of 2022 (IRA 2022), and it’s most likely effects on tax law (you can read that here). Yet still, several days after IRA 2022, I see lawmakers actually spreading the same tripe as quoted by careless Twitter users that have never worked at IRS and, prior to IRA 2022, were completely unaware that IRS has special agents, which are not the same as revenue agents.

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The whole quote of 87,000 agents that IRS will be hiring? It was an estimate proposed last May, that is in no way a definite plan for this year, just a “wish list” that I, as a federal employee, can confirm is hopeful at best, and IRS would be lucky to hire and retain half of this amount. The hiring levels rarely meet the amounts that agencies project, simply because turnover still happens, other hiring takes priority, and some people will leave because of termination, resignation, or transfer to other agencies. Also, this is a projection for a 10 year hiring plan, because there isn’t enough staff or resources to possibly train 87,000 agents within the next year. The IRS has recorded a record low of auditors and agents, with numbers being the lowest they’ve been since World War II.

Cries about these auditors and agents targeting people earning less than $400,000? Accurate on the surface, but it takes a little digging to understand a critical point. The assertions about people earning less than $400,000 came from Secretary of the Treasury Janet Yellen, who stated something that many completely disregarded (or simply were unable to comprehend): she directed that, “any additional resources—including any new personnel or auditors that are hired—shall not be used to increase the share of small business or households below the $400,000 threshold that are audited relative to historical levels.” That historical levels part really tripped up the speedy (non-critical) readers, and caused all manner of histrionics. According to IRS, these agents, “cannot simply be assigned to global high wealth, partnership, or large and complex business examinations without the requisite skills, training, and experience to analyze returns that are highly complex[…]”; that means they will have to practice honing their audit skills prior to get these $400K+ returns. And, since the historical levels have been much higher than they are currently, you can reasonably expect that some individuals earning less than $400K per year will be audited because, historically, they were. I’d be worried if you follow advice from people who refuse to read for clarity, and who jump on catchy soundbites that suit certain narratives.

Again, to be clear, no one said that all individuals earning less than $400K would be audit free: EVERYONE has noted that the audits for this group shouldn’t go up disproportionately. Only time will tell whether this will happen, but on the outset, realize that Yellen never said that people earning less than $400K were exempt from audits. Many skipped over this part because it didn’t serve a narrative about IRS being the horrible bullies that mistreat every American that cross their paths.

As I stated above in my post from LinkedIn, one source is not enough, and exploitation and monetization of outrage is exactly what certain influential groups desire. I’ve read information from IRS, Government Accountability Office (GAO), and Congressional Budget Office (CBO), as well as groups that disagreed with the measures, such as The Heritage Foundation and a statement from the Republican House Budget Committee Members. I’d caution most people to read multiple sources – from a variety of perspectives – and to ask, “Qui bono?” (Who benefits?) as you read. The same people criticizing certain tax legislation often organize groups, movements, and products designed to get money from their supporters/readers. The same can absolutely be said for those that are eager to support tax legislation, without offering critical analyses of how they have reached the conclusions they so eagerly share on their platforms and social media at large. In short, hot takes are rarely supported by the amount of analysis needed to make a balanced and fair assessment. These groups KNOW that, and capitalize on it.

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Our rapt attention is currency (hence the phrase, “Pay attention”). Be mindful of how your attention has been monetized by the people whose opinions you adore: most of them are pandering to our worst fears because it is (and always has been) a lucrative gig, and it’s a far more profitable angle than giving balanced, neutral opinions that neither stir hope nor fear in our hearts. Our biggest worry about IRA 2022 should be all of the people trying to cash in on our worries: they’ve figured out how to “sell shovels” to us and many of us don’t even know it.

Welcome to 2022! What Will You Create This Year?

Hi everyone! Welcome to 2022!

I hope you all have been safe and blessed this past year, and I wish upon you more safety, good health, love and wealth in the year to come.

I had every intention of posting more throughout 2021, but there were a lot of changes in my offline life that made that difficult. That main change was this –

I didn’t know if I wanted to offer financial advice anymore.

In hindsight, I realize that was a bit absurd: even if I didn’t offer my musings online, my offline family and friends would still ask me money questions, I would still take continuing education courses to maintain my license(s), and I’d still be fascinated by the worlds of money, tax and wealth. So, for me, there was no way to avoid being part of this world.

Yet, I still questioned whether this is what I wanted long-term. I had originally structured this space for coaching and consulting, but I realized that the coaching options were not my ideal setup, and consulting still didn’t resonate. Now I understand that I don’t have to do either one: I can simply share tips here and there, offer some advice, and if it feels inspired, offer options that allow a deeper dive into certain concepts.

So I’m back – on my terms, and in my power. And I’m excited to share the things that I’ve learned over the past several years with you all: I’ve got some tips for wealth creation that will be mind-blowing! I’ll resume with my posts next week, and we’ll take this dive into the world of money together.

I hope you all will join me on this journey: I’d love to share it with you all! Until then, have a great weekend, take care, and I’ll talk to you all soon!

It’s Good to Be Back!

It’s been a LONG time, but I’m finally back!

Did you all miss me 😉 ?

I have had many life changes over the past few years, which I will share with you in the weeks to come. Naturally, all of those changes impacted my personal finances in either a positive or negative way, and I’ve been taking my notes and figuring out a blueprint for how to handle money better. Whether you feel like you’re no good with money, or you feel like a money pro, I think the information I’ll be sharing will benefit you tremendously.

In addition, I’ve been watching the financial scene both up close and from a distance (through my work as an enrolled agent and my current position as a financial analyst). Please note that all of the information presented on this blog is my own and strictly opinion, though I’ll always offer source material and references whenever possible. These posts do not constitute a financial advisory relationship, though if you’re interested in my services, you can contact me and we can discuss whether we should work together.

Of course, if you have additional tips or ideas that can help make this blog even better, I’d love for you to share them with me and all of the other readers of this blog.

Welcome to 2021, and let’s make our money stories AMAZING! I’ll talk to you all soon!

On Connecting With Likeminded Individuals

This post is a little different from the others, as this is related to an experience that I had a little over a week ago. I had the chance to attend a business conference that encouraged me to continue offering my clients the BEST. This conference clarified some information that I received while I was building my business, but the concept of “training” was only a small part of the value I received while at the conference.

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Photo I took after I got back to my room. Each business card represents an amazing entrepreneur that I met while I was at the conference.

*****

I got the invaluable experience of CONNECTING with many likeminded women, all on similar paths, all working on taking their talents to those that need them most. I found these women SO encouraging and inspirational! There were entrepreneurs from all different walks of life, and all of us were putting the WORK into creating the lifestyles of our dreams, by offering our highest gifts to others. Not only were these women likeminded, but they were all so nice and positive. Everyone was kind and genuinely wanted everyone else to succeed.

As a rule, I try to limit my exposure to “feel-good” rhetoric that is all emotion and little action. I was thrilled that the conference was NOT a bunch of endless chatter with no one actually DOING what they say that they want to do. Everyone in the room was committed to taking action, were already on their paths, and/or able to share how they have gotten tangible results from the actions that they have taken! Honestly, how many of us have walked away from an event and said, “Now THERE’S a group of folks taking action”? It’s a rarity, I assure you. I was delighted to see that this conference wasn’t a bunch of meaningless talk.

*****

The conference ended with the hostess offering the audience the chance for intense, targeted coaching that would guarantee success. Knowing that I have many obligations this year, I declined the opportunity. If I was willing to forgo some of those obligations, then I would have committed to the program. But in any case, I’m honored to have been in the presence of so many amazing women, and I’m so happy that I took advantage of this conference. Being in the presence of so many likeminded women was so inspirational, and I’ll cherish this experience forever.

If you are interested in learning more about the conference, please visit the Happy Black Woman website and Facebook page for more information. I think you’ll find it very useful!

This Website is One Month Old!

I’m so excited to announce that this website is officially one month old!

I’m still learning so much, as I have never worked on WordPress so extensively. I have found myself accidentally submitting blog posts when what I meant to do was save them as drafts (that has happened more than once, and actually happened earlier today)! I found out- the hard way- that the beautiful colors I’d selected were only available under Premium accounts. I learned about email forwarding, sharing on social media, and the amazing convenience of scheduling posts.

Working through the details of a business, then going into the creation of a website, was quite the undertaking. I’m just glad that I’m finally on this path. I look forward to sharing more valuable information with you all in the future! In the meantime, I will be celebrating this one month anniversary!