10 SEP 2024 / REGULATORY

IRS Recovers $1.3B from Wealthy Tax Evaders

The IRS is back in business, folks, and they’re not messing around. On September 6, 2024, the U.S. Department of the Treasury and the IRS announced at their Austin, Texas campus that they’ve raked in a whopping $1.3 billion from high-wealth individuals dodging their tax bills. It’s all thanks to the Inflation Reduction Act and a whole lot of IRS elbow grease.

Kicking things off in February 2024, the IRS went after 125,000 high-income earners who hadn’t filed taxes since 2017. We’re talking about the folks pulling in between $400,000 and over $1 million a year—yeah, those big spenders. The IRS used third-party information like W-2s and 1099s to track down these non-filers. The result? Nearly 21,000 of them have come clean, coughing up $172 million in back taxes in just six months. It's not too shabby for an agency that’s been strapped for cash for years.

But the IRS wasn’t done yet. Last fall, they expanded their crackdown, targeting 1,600 high-rollers with more than $1 million in income and $250,000 in unpaid taxes. And guess what? Nearly 80% of these millionaires ponied up, adding another $1.1 billion to the Treasury’s coffers. That’s an extra $100 million since July alone. Talk about a windfall!

Treasury Secretary Janet Yellen didn’t hold back in her remarks, saying, “Between 2010 and 2018, the audit rate for millionaires fell by 80%, and the top 1% was estimated to owe over one-fifth of unpaid taxes. That’s not just unfair; it’s downright ridiculous.”

Beyond the audits, the IRS has been making waves with new digital tools, thanks to Inflation Reduction Act funds. They’ve launched a Business Tax Account, improved the “Where’s My Refund?” tool, and are rolling out tech updates that bring the IRS into the 21st century—finally. The aim? A smooth, digital-first experience for taxpayers that’s a far cry from the phone-hold nightmares we’re all used to.

As the IRS tightens the screws on wealthy tax dodgers and modernizes its approach, it’s clear they’re playing hardball. With billions at stake and new resources in hand, the IRS is making sure the days of “tax dodge and dash” are over. So, if you’re among the high-flyers, it might be time to get those ducks in a row—because the IRS is watching, and they’re ready to collect. Know more about the topic click here.