IRS Collected $500M From Wealthy Tax Cheats

The Internal Revenue Service continues to take “swift and aggressive action” to rein in high-income tax cheats, recovering in the past year $520 million in back taxes from individuals with more than $1 million in income and more than $250,000 in recognized tax debt, IRS Commissioner Danny Werfel told lawmakers.

“That’s half a billion dollars recovered from fewer than 1,000 millionaires and billionaires,” Werfel said in recent testimony.

On Sept. 8, the IRS said that it was shifting its attention to wealthy taxpayers, partnerships and other high earners “that have seen sharp drops in audit rates” during the past decade.

“It will be driven with the help of improved technology as well as Artificial Intelligence that will help IRS compliance teams better detect tax cheating, identify emerging compliance threats and improve case selection tools to avoid burdening taxpayers with needless ‘no-change’ audits,” the agency explained.

The new compliance initiative was funded by the $80 billion, 10-year funding boost the IRS received in 2021 under the Inflation Reduction Act. A spending deal in 2023 clawed back $20 billion of that funding.

Werfel told lawmakers on Feb. 15 that achieving the agency’s “ambitious transformation agenda requires us to rebuild areas in the IRS that have suffered from more than a decade of underfunding that preceded the IRA.”

2024 Filing Season

Providing an overview of the 2024 tax filing season, which began on Jan. 29, Werfel said that it’s “going smoothly so far,” and that through Feb. 2, the IRS received more than 15.3 million individual income tax returns and issued more than 2.6 million refunds for approximately $3.65 billion.

The agency also has a goal this year of providing more in-person help at its Taxpayer Assistance Centers, he added.

“The goal is to provide over 8,500 more hours of in-person assistance than we did last filing season,” Werfel told members of the House Ways and Means Committee on Feb. 15.

“We are expanding hours at nearly 250 TACs around the country during the filing season; again offering special Saturday hours at certain TAC locations; and opening more pop-up centers to reach taxpayers who do not live near a TAC,” he said.