The Internal Revenue Service (IRS) has announced its intention to target 125,000 high-income earners who have failed to file tax returns dating back to 2017. The agency estimates that hundreds of millions of dollars in unpaid taxes are at stake in these cases.
Starting this week, the IRS will be sending noncompliance letters to more than 25,000 individuals earning over $1 million annually and 100,000 individuals with incomes ranging from $400,000 to $1 million who have neglected their tax obligations between 2017 and 2021.
This initiative is part of the IRS's ongoing efforts to combat tax evasion among high-wealth individuals, as mandated by the Inflation Reduction Act of 2022 and a directive from Treasury Secretary Janet Yellen to focus on non-compliance among higher-income brackets while not increasing audit rates for those earning less than $400,000 per year.
IRS Commissioner emphasized the importance of upholding tax laws, stating that failure to file taxes unfairly burdens law-abiding taxpayers who fulfill their civic duty. He stressed that there are consequences for those who do not meet their tax obligations.
In recent months, the IRS has launched various campaigns targeting wealthy individuals who exploit the tax system or evade taxes. For example, the agency plans to conduct audits on businesses' use of private jets for personal purposes and tax deductions. Earlier this year, the IRS successfully collected around $500 million in overdue taxes from delinquent millionaires.
The IRS acknowledged that its non-filer programs have been sporadic since 2016 due to funding and staffing constraints. However, with increased resources from recent legislation, the agency now has the capacity to carry out essential tax administration work.
Overall, the IRS aims to address non-compliance among high-income earners and ensure that all taxpayers fulfill their tax obligations to maintain fairness and integrity in the tax system.
