The Inflation Reduction Act’s Impact on Business ValuationThe Inflation Reduction Act’s Impact on Business Valuation
A shortage of personnel at the IRS may affect how you handle audits.
January 24, 2023
On Aug. 16, 2022 President Biden signed into law the Inflation Reduction Act (the Act).1 This law gives the Internal Revenue Service an additional $80 billion dollars and 87,000 employees over the next 10 years. Some of these goals are reflected in the IRS Strategic Plan for fiscal years (FY) 2022-2026 (Strategic Plan), which provides a roadmap to guide IRS operations. Here’s some background on the Strategic Plan, an analysis of what the Treasury department and Congressional leadership are focused on, the short-term impact on business valuation at the IRS and recommendations on how you may want to proceed going forward.2
Historical Perspective
The 2022-2026 Strategic Plan lists IRS accomplishments:
Processed 269 million tax returns in fiscal year (FY) 21;
Processed 492 million economic relief payments that were distributed (FY 20-21);
Collected $4.1 trillion in revenue in FY 21;
Collected $75 billion in enforcement revenue in FY 21;
Processed an average individual refund of $2,816 in FY 213
Key Elements of Strategic Plan
The Str...
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