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Robert Kovacev Quoted on IRS Spending of IRA Appropriations in Thomson Reuters Checkpoint

"The Long Read: What to Expect From a Freshly Funded IRS"

Thomson Reuters

Rob Kovacev, former senior litigation counsel in the Tax Division of the U.S. Department of Justice (DOJ), addressed questions raised about how the Internal Revenue Service (IRS) will spend the funding it is set to receive under the Inflation Reduction Act (H.R. 5376). Kovacev said audit rates for those under the $400,000 threshold aren't likely to change, or at least won't increase. "The biggest need for resources in enforcement has to do with auditing large corporations and high-net-worth families, because that's where the money is," he noted. The question is whether the audit rates for those making over $400,000 will return to the higher audit rates of 2010 and before. Kovacev suggested the IRS may want to "get it even higher." According to Kovacev, the new enforcement funds won't only be used to bring on more employees. There will also be investments toward "sophisticated data analytics and artificial intelligence tools, which in the long run will probably be much more profitable than just adding a bunch of bodies." Kovacev said that "a big chunk" of the appropriation will be deployed toward current compliance enforcement priorities in areas such as conservation easements, microcaptive insurance companies, and virtual currency.