Fiscal Responsibility Act

Biden signed the Fiscal Responsibility Act on June third, ending the debt limit crisis. The act increases the federal debt limit and suspends the federal debt limit until January 2025. It also ends the current student loan repayment pause, meaning that student loan repayments will resume towards the end of the summer. It also cuts about $20 billion of the $80 billion funding provided to the IRS by the Inflation Reduction Act. This could mean that the anticipated improvements in IRS taxpayer services will be delayed or canceled. What this means for you is that you can likely continue to expect long delays in processing, especially of paper filed returns and requests, and that if you have an IRS issue, expect it to take many months to resolve. The IRS, however, has said that it will continue with its plans to ramp up enforcement, and is focusing on high net worth individuals for audit selection. Ideally what this means is that it can shift some focus away from audits of low- to medium-income taxpayers.