IRS targets 125,000 high earners in sweeping tax evasion crackdown
The Internal Revenue Service (IRS) has launched a fresh crackdown on high-income individuals who have evaded filing federal income tax returns. Over 125,000 cases have been identified, with many involving substantial unpaid taxes.
The IRS is set to send out approximately 600,000 letters to nonfilers, starting with those in the highest income brackets. This comes after a pause in enforcement due to budget and staffing constraints since 2016. New funding from the Inflation Reduction Act is now enabling the IRS to broaden its enforcement efforts.
Among the nonfilers are over 25,000 individuals with incomes exceeding $1 million per year, and over 100,000 with incomes between $400,000 and $1 million. The IRS estimates that collectively, these high-income nonfilers owe hundreds of millions of dollars in unpaid taxes. So far, the IRS has collected over $500 million in its broader effort to recover delinquent taxes.
Interestingly, some high-income nonfilers may actually be owed a refund due to excess withholding or applicable credits and deductions. However, the IRS warns that nonfilers risk liens on their assets and levies on their wages and bank accounts if they continue to avoid filing tax returns or paying taxes.
The IRS's enforcement efforts are expected to continue, with between 20,000 and 40,000 letters being sent out weekly to nonfilers. High-income individuals are urged to review their tax situations and file any outstanding returns to avoid potential penalties and seizures.
