IRS Targets Uber-Wealthy Tax Cheats, Demands Millions
The IRS has announced its intention to crack down on high-profile tax cheats and recover hundreds of millions of dollars from them in the upcoming months. This move comes as part of the Biden Administration’s efforts to bridge the tax gap and ensure that all taxpayers, regardless of their wealth, fulfill their obligations to the nation.
Our goal is to level the playing field and hold wealthy filers accountable for paying their fair share, said IRS Commissioner Daniel Werfel. It’s frustrating to see individuals and partnerships evade taxes while hardworking Americans fulfill their responsibilities.
The agency plans to aggressively pursue around 1,600 millionaires and 75 large business partnerships who have been habitually avoiding paying their taxes. The targeted millionaires owe a minimum of $250,000 each in back taxes, while the partnerships have average assets of approximately $10 billion. To ensure the success of this initiative, the IRS will be hiring additional revenue agents dedicated to these high-end collection cases, with the aim of initiating the crackdown in October this year.
Earlier this summer, the Biden Administration launched a tax enforcement campaign that yielded impressive results. In just a few months, the IRS collected $38 million in delinquent taxes from more than 175 high-income taxpayers. This success has paved the way for the agency to intensify its efforts and target even wealthier tax dodgers.
The crackdown is being bolstered by funding from the Inflation Reduction Act, which aims to generate more tax revenue for the nation. With these additional resources, the IRS will be equipped to go after larger and wealthier tax evaders in the coming years. Furthermore, the agency is embracing cutting-edge technology, including artificial intelligence tools, to detect sophisticated tax evasion tactics that might go unnoticed by the human eye.
New tools are revolutionizing our ability to uncover patterns and trends that were previously hidden. This allows us to have greater confidence in identifying large partnerships that may be shielding income, explained Werfel.
A recent study conducted by a team of academic economists and IRS researchers in 2021 revealed that the top 1% of income earners in the United States fail to report over 20% of their earnings to the IRS. This further strengthens the case for the IRS to crack down on tax cheats and ensure everyone pays their fair share.
In an effort to address concerns regarding audit rates, Commissioner Werfel assured citizens earning less than $400,000 a year that they will not experience an increase in their audit rates. This new compliance push aims to fulfill the promise of the Inflation Reduction Act by holding the wealthiest filers accountable and ensuring they pay the full amount of taxes they owe.
For years, the IRS has faced challenges due to underfunding, leading to historically low audit rates for wealthy filers. However, with the Inflation Reduction Act and increased support, the agency is now determined to rectify the situation and restore fairness to the tax system.
As the IRS gears up to target uber-wealthy tax cheats, it is clear that the Biden Administration is committed to narrowing the tax gap and ensuring that every taxpayer fulfills their responsibility to contribute to the nation’s progress. By employing advanced technologies and allocating adequate resources, the agency aims to create a level playing field where everyone pays their fair share, regardless of their wealth. This crackdown on tax evaders sends a strong message: no one is above the law when it comes to taxes.
