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Treasury recovers $1.3 billion in unpaid taxes from high-wealth tax dodgers

September 6, 2024

By Fatima Hussein | The Associated Press

The IRS has collected $1.3 billion from high-wealth tax dodgers since last fall, the agency announced Friday, crediting spending that has ramped up collection enforcement through President Joe Biden’s signature climate, health care and tax package signed into law in 2022.

Treasury Secretary Janet Yellen and IRS Commissioner Danny Werfel traveled to Austin, Texas, to tour an IRS campus and announce the latest milestone in tax collections as Republicans warn of big future budget cuts for the tax agency if they take over the White House and Congress.

Yellen said in a speech in Austin that in 2019, the top one percent of wealthy Americans owed more than one-fifth of all unpaid taxes, “leaving ordinary Americans to shoulder the burden.”

“To fix this, we’ve channeled IRS funding toward significant investments to combat tax evasion,” she said.

In 2023 and 2024 the IRS launched a series of initiatives aimed at pursuing high-wealth individuals who have failed to pay their tax debts. The IRS said the campaign is focused on taxpayers with more than $1 million in income and more than $250,000 in recognized tax debt.

Agency officials said since the program’s launch, almost 80% of the 1,600 millionaires targeted by the IRS for failing to pay a delinquent tax debt have now made a payment, leading to over $1.1 billion recovered. And in the first six months of a new February 2024 initiative, the IRS collected $172 million from 21,000 wealthy taxpayers who have not filed tax returns since 2017.

Republicans have called for funding for the IRS to be cut.

Donald Trump’s campaign for president said he would drastically reduce spending on federal agencies — and that Democratic nominee Kamala Harris “cast the tiebreaking vote to hire 87,000 new IRS agents to go after your tip income.”

That debunked claim comes from a plan the Treasury Department proposed in 2021 to bring on that many IRS employees over the next decade if it got the money. At least 50,000 IRS employees are expected to retire over the next five years.

The National Taxpayer Advocate, the independent IRS watchdog, issued a 2023 annual report stating that the IRS employs roughly 681 armed agents.

In its efforts to modernize, the agency this year also launched a program called Direct File, which allows people with very simple W-2s to calculate and submit their returns directly to the IRS. The IRS said in April that those using the program claimed more than $90 million in refunds.

While the program included 12 participating states in the 2024 tax filing season, more states have joined in for the 2025 tax season, including Maryland, Oregon, New Jersey, Pennsylvania, New Mexico, Connecticut, North Carolina, Wisconsin, and Maine.

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Orange County Register

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Treasury recovers $1.3 billion in unpaid taxes from high-wealth tax dodgers

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