The IRS reported that it recovered more than $1 billion from wealthy individuals who have not paid taxes since 2017
This week, the Internal Revenue Service (IRS) reported significant progress in tax collection, thanks to the measures established by the Inflation Reduction Act. According to the announcement, the agency has succeeded in securing payment of taxes owed by wealthy individuals, recovering a total of $1.3 billion.
This success is due to an initiative targeting 125,000 high-income taxpayers who had not filed their taxes since 2017. Crucial information for this operation was obtained through W-2 and 1099 forms, which revealed that these individuals had gotten income ranging from $400,000 to more than $1 million, but had not complied with their attorney obligations.
IRS budget increase
The IRS has been able to carry out these effective measures because of the increased budget provided by the Inflation Reduction Act. This increase in resources has allowed the tax agency to expand its audit and monitoring capabilities, making it easier to identify and recover unpaid taxes more effectively.
With the additional support from the Act, the IRS now has a greater ability to pursue taxpayers who attempt to evade their tax liabilities, thereby ensuring greater fairness in the tax system.
Here’s how the IRS has recovered unfiled tax money from wealthy individuals
Here’s how the IRS has recovered money for unfiled taxes from wealthy individuals. After successfully collecting $38 million from more than 175 wealthy and high-income individuals last year, the IRS expanded the effort last fall to include approximately 1,600 additional high-income individuals. Of those 1,600 millionaires with delinquent attorney debts, nearly 80% have already made some payment, recovering more than $1.1 billion.
Moreover, in the first six months of the new initiative launched in February, nearly 21,000 of the 125,000 wealthy taxpayers have filed their tax returns, resulting in the payment of $172 million in taxes. This expansion of collection efforts has proven effective in addressing the tax debts of high-income individuals, contributing significantly to the increased recovery of funds owed.
IRS Introduces Digital First Tool to Improve Taxpayer Service
Thanks to the new budget, the tax agency has also been able to implement the Digital First initiative to significantly improve taxpayer service in person, by phone and online.
The IRS has launched more digital tools in the past two years than in the previous 20 years, which include:
- More than two dozen new features and enhancements to the individual and tax professional online accounts.
- The launch of the Business Tax Account
- The launch of 30 mobile-friendly digital forms
- The ability for taxpayers to get the status of their refund through a conversational hotline
- A mobile-friendly web tool for Where’s My Refund?
- Direct File, a new tool that allows taxpayers to file their returns for free, directly with the IRS.
On the other hand, through the Digital First Initiative, the IRS is looking for taxpayers to conduct all of their transactions digitally if they prefer. Now, with their individual account, taxpayers can:
- View the status of refunds and certain audits.
- Access a complete overview of their account information, including detailed historical data.
- Access identity protection services, a lien settlement calculator, and the ability to complete the pending payment settlement process via telephone.
- pending payment settlement process via smartphones or tablets.
- Retrieve tax-related information from a single source, including digital copies of notices and letters, with more than 170 different types of notices and letters available.