On July 11, 2024, the Internal Revenue Service announced that they surpassed the $1 billion threshold in collecting past-due taxes from uber-wealthy taxpayers. The collection efforts focus on taxpayers with more than $1 million in income and more than $250,000 in recognized tax debt. The IRS is pushing compliance efforts under the Inflation Reduction Act, which provided funding for several new initiatives.
“Years of funding declines meant the IRS couldn’t get to money that we knew was owed, but we simply didn’t have the resources or staffing to collect,” according to IRS Director Danny Werfel. “Funding from the Inflation Reduction Act is reversing a decade-long decline in our compliance work, including increasing our compliance work involving the wealthiest individuals and groups with tax issues. The collection results achieved in less than a year reveal the magnitude of what can be achieved over the long run as our Inflation Reduction enforcement continues to ramp up in the months ahead.”
Werfel said that the funding from the Inflation Reduction Act has helped in these two initiatives:
To address the enforcement work, the additional funding at the IRS has resulted in the hiring of new staff and the implementation and deployment of new technology.
A a decade of budget cuts made it nearly impossible for the IRS to investigate the complex web of transactions and strategies used by the wealthiest taxpayers to evade taxes. The IRS is determined to bring those wealthy non-payers and non-filers to justice. The new initiative involves more than 25,000 people with more than $1 million in income, and over 100,000 people with incomes between $400,000 and $1 million between tax years 2017 and 2021. These are all cases where the IRS has received third party information—such as through Forms W-2 and 1099s—indicating these people received income in these ranges but failed to file a tax return.
Other elements of the agency’s renewed compliance focus include:
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