The IRS is set to pursue 125,000 high-income individuals who failed to file tax returns between 2017 and 2021, with an anticipated collection of around $100 billion in back taxes. Starting this week, the agency will send noncompliance letters to over 25,000 individuals earning over $1 million annually and 100,000 individuals earning between $400,000 and $1 million annually.
This initiative is part of the IRS’s ongoing effort to target high-wealth tax evaders, spurred by funding from the Democrats’ Inflation Reduction Act passed in 2022 and a directive from Treasury Secretary Janet Yellen not to increase audit rates for those earning less than $400,000 annually.
IRS Commissioner Daniel Werfel emphasized the importance of holding individuals accountable for their tax obligations, stating that failure to file taxes is unfair to law-abiding taxpayers.
In addition to targeting non-filers, the IRS has launched campaigns to address tax evasion among high-wealth individuals, including audits on businesses’ use of private jets and the collection of overdue taxes from delinquent millionaires.
Werfel highlighted that the IRS’s non-filer programs had been inconsistently implemented since 2016 due to resource constraints in terms of funding and staffing. However, with the allocation of resources from the Inflation Reduction Act (IRA), the IRS now possesses the capacity to effectively carry out this essential tax administration work.