IRS Recovers $520 Million in Unpaid Taxes from Millionaires
The Internal Revenue Service (IRS) has made significant strides in cracking down on tax evasion by high-income households, recovering more than $520 million from 1,600 millionaires who were behind on their taxes. This success is attributed to the increased scrutiny on high-income taxpayers, made possible by the funding provided by the Inflation Reduction Act. However, the progress in recovering unpaid taxes has sparked political controversy, with Republicans seeking to repeal a portion of the funding aimed at ramping up IRS enforcement.
According to IRS Commissioner Danny Werfel, the agency has been actively increasing scrutiny on high-income taxpayers to reverse the historic low audit rates and limited focus that the wealthiest individuals and organizations faced in the years preceding the Inflation Reduction Act. The IRS has particularly targeted individuals owing at least $250,000 in back taxes, successfully recovering $360 million from this group, in addition to the roughly $160 million recovered as of last October.
The Inflation Reduction Act, which was signed into law in 2022, allocated a substantial $80 billion in additional funding for the IRS over 10 years. This funding has played a pivotal role in enabling the IRS to bolster its enforcement efforts and recover more unpaid taxes owed by high-income individuals. However, the success in recovering unpaid taxes has led to a contentious debate in Congress, with Republicans advocating for the repeal of $20 billion of the funding intended to ramp up IRS enforcement.
Grover Norquist, a prominent conservative activist, criticized the Democrats’ Inflation Reduction Act, highlighting that in little more than a year since its enactment, Republicans have repealed roughly half of the funding aimed at ramping up audits on taxpayers. The ongoing push by Republicans to claw back a portion of the funding underscores the political divide regarding the allocation of resources to IRS enforcement activities, particularly in relation to high-income taxpayers.
In summary, the IRS’s significant recovery of unpaid taxes from high-income individuals, including 1,600 millionaires, underscores the impact of increased enforcement efforts made possible by the funding provided under the Inflation Reduction Act. However, the political debate surrounding the allocation of resources to IRS enforcement activities continues, with Republicans seeking to curtail a portion of the funding, emphasizing the ongoing tension between parties regarding tax enforcement and the oversight of high-income taxpayers.