Yes, the IRS Still Exists

If you look through headlines lately, it catches one’s eye just how many stories are written with some take on ‘What does this mean?’ President Donald Trump and his administration are pursuing so many of their goals in unorthodox ways that what will happen at the end (and just when that end will come) after first steps are made is not always clear. This has soaked into the tax world in a big way considering the time of year as there seems to even be some confusion out there about whether people need to complete tax returns this year or if they will receive their refunds if they do.

To at least tackle that quickly – yes, you still need to file your taxes and, yes, if you are owed a refund, you will receive it.

But it is easy to see how people could think this when the IRS already has endured job cuts during their biggest season and only seem to be in danger of facing more of them.

Even beyond those immediate concerns, though, we are in a spot where future confusion only appears inevitable. After all, Republicans on the whole have promised a list of tax cuts while in the House they have also set a $4.5 trillion limit on the money the federal budget can lose over the next 10 years due to tax cuts.

Just extending the tax cuts that were put into place during the first Trump administration would take up much of that limit. This is going to make it difficult to also include promises to not to tax tips or overtime, lower taxes on Social Security benefits, and increase the deduction for state and local taxes.

I suppose the good news in this is that it looks like you will have to be in a special situation to end up paying more taxes once this all shakes out. The bad news is that it is difficult to plan for anything upcoming when you can’t know exactly what is upcoming.

So, let’s go back now to the idea that you do still have to file a tax return, for the way to operate in the immediate future is just as you are operating now. Until we get to a final stage where things actually change, we have to go with what the current rules are. This includes the fact that taxes and the IRS still exist.  If and when something does happen, though, it looks like most are just going to get to call it a pleasant bonus. 

Warmly,

Josh Bousquet
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