The IRS has announced that it has successfully collected $1.3 billion from high-wealth tax dodgers since last fall. This achievement is attributed to increased collection enforcement efforts following the enactment of President Joe Biden's climate, health care, and tax package in 2022.
Treasury Secretary Janet Yellen and IRS Commissioner Danny Werfel visited an IRS campus in Austin, Texas, to disclose this significant milestone in tax collections. Yellen highlighted that in 2019, the top one percent of wealthy Americans accounted for over one-fifth of all unpaid taxes, placing a disproportionate burden on ordinary taxpayers.
To address this issue, the IRS has directed funding towards substantial investments in combating tax evasion. In 2023 and 2024, the IRS initiated a series of campaigns targeting high-wealth individuals with income exceeding $1 million and recognized tax debt exceeding $250,000.
Since the launch of these initiatives, nearly 80% of the 1,600 millionaires identified by the IRS for failing to pay delinquent tax debts have made payments, resulting in the recovery of over $1.1 billion. Additionally, in the first six months of a new initiative introduced in February 2024, the IRS collected $172 million from 21,000 wealthy taxpayers who had not filed tax returns since 2017.
Despite these successes, there have been calls from Republicans to reduce funding for the IRS. Former President Donald Trump's campaign has advocated for significant cuts in spending on federal agencies, including the IRS. The campaign has criticized Democratic nominee Kamala Harris for supporting the hiring of 87,000 new IRS agents to pursue tax evasion.
Furthermore, the IRS has launched the Direct File program in 2024 to modernize tax filing processes. This program allows individuals with simple W-2 forms to calculate and submit their returns directly to the IRS. As of April, participants in the program have claimed over $90 million in refunds.
In the 2024 tax filing season, 12 states participated in the Direct File program. However, for the upcoming 2025 tax season, additional states, including Maryland, Oregon, New Jersey, Pennsylvania, New Mexico, Connecticut, North Carolina, Wisconsin, and Maine, have joined the initiative to streamline tax filing procedures.
