The Internal Revenue Service on Friday announced the launch of a “sweeping effort” to aggressively pursue some 1,600 millionaires and 75 large business partnerships that owe hundreds of millions of dollars in past taxes.
In a statement,the IRS said it planned to “shift attention to wealthy from working-class taxpayers.”
Further, by capitalizing on Inflation Reduction Act funding, following a “top-to-bottom review of enforcement efforts,” and employing improved technology including artificial intelligence, the IRS said it will ensure that the number of audits on those earning less than $400,000 a year will not increase.
“If you pay your taxes on time it should be particularly frustrating when you see that wealthy filers are not,” IRS Commissioner Daniel Werfel told reporters during a conference call. He added that some 1,600 millionaires who owe at least $250,000 each in back taxes, along with 75 large business partnerships that have assets of roughly $10 billion on average, are targeted for the new “compliance efforts.”
A team of economists and IRS researchers in 2021 found that the top 1% of income earners in the U.S. fail to report more than 20% of their earnings in their tax filings.
The newly announced tax collection effort are set to begin as soon as October, though House lawmakers’ threat of a government shutdown at the end of September could potentially lead to budget cuts at the IRS—on top of $1.4 billion in cuts to the tax agency enacted earlier this year.