The IRS collected tens of millions from wealthy people who didn’t file tax returns – here’s how much

Wealthy people who haven’t filed tax returns for years have already paid $172 million in back taxes to the Internal Revenue Service, according to the first results of the agency’s revived program targeting scofflaws.

At the same time, the IRS collected another $100 million in back taxes from wealthy households that filed tax returns but didn’t pay their bill. That effort has now collected $1.1 billion since it began a year ago, Treasury officials said Friday.

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Between the two initiatives, the IRS has already collected nearly $1.3 billion — and more taxes are still owed on the table.

The initial results come from about 21,000 of the 125,000 households that are believed to have not filed tax returns since 2017.

From the archives (December 2022): Annual IRS audits of US Presidents and Vice Presidents are mandatory. Just not while Trump was in the White House.

“This is just a first milestone and we look forward to more progress going forward,” Treasury Secretary Janet Yellen said, according to excerpts from a speech on Friday.

After a flurry of quickly resolved cases, there could be hundreds of millions of dollars more coming into federal coffers before unfiled returns are addressed, a senior Treasury Department official said.

Meanwhile, around 80% of the 1,600 millionaire households left behind with undisputed tax debts have now made a payment. In July, the IRS said it had passed the $1 billion mark for those back taxes.

The withdrawal is separate from other recent measures to strengthen peak tax enforcement. These include audits of nearly 80 complex partnerships, such as hedge funds and law firms.

Two years ago, the IRS received billions of dollars over a decade from the Personnel and Technology Inflation Relief Act that will strengthen law enforcement for businesses and wealthy households while improving customer service.

Although the Inflation Relief Act passed in 2022 with Democratic support, Republican lawmakers have been wary of the multibillion-dollar infusion for potential overreach and waste. GOP lawmakers were able to write off about $20 billion of the $80 billion 10-year allocation during the 2023 debt ceiling negotiations.

The story continues

The IRS spent $5.7 billion of the $57.8 billion allocated through March, according to the Treasury’s inspector general for tax administration.

The agency has outlined its spending plans and results since the law passed in 2022. For example, the nonfiler program has operated intermittently since 2016 due to budget and staffing limitations, the Treasury Department said.

When people file tax returns, they must report information on tax forms like W-2s and 1099s, even though the IRS gets its own copies.

In the nonfiler program, the IRS had those forms but never received a tax return. The forms he had showed income between $400,000 and $1 million more. Additional staff are only needed to handle correspondence with nonfiling households and their representatives, IRS Commissioner Danny Werfel previously said.

Friday’s announcement happened to come a day after Hunter Biden pleaded guilty to federal tax charges and avoided a trial. Prosecutors said President Joe Biden’s son failed to pay $1.4 million in taxes.

When Werfel announced the restart of the nonfiler program in February, he noted that there are a number of consequences when people don’t file tax returns. Depending on the facts, that can extend from IRS penalties to criminal cases on the other end, he noted at the time.

From the archives:

The IRS is collecting $38 million from “delinquent millionaires” — and it’s just getting started

The IRS says audits of wealthy people and corporations are about to reach a whole new level. Shut up.

The IRS says it’s going after wealthy tax cheats. Here’s what the new audit statistics show.

IRS crackdown on top taxpayers racks up millions in back taxes

Additional background:

House Republicans are attacking the IRS. Here’s how they want to cut funding by $2 billion.

The Republican-led House passes a package of rules and a bill to cut IRS funding

Kevin McCarthy, other top Republicans vow to drop IRS hiring plans if they win House majority

The cost of repealing IRS funding? Over $100 billion, says the federal budget watchdog.

IRS reveals how it’s spending $80 billion in extra funding — wealthy taxpayers and big corporations can expect more scrutiny

IRS has made ‘limited progress’ on setting audit rates for those earning under $400,000, watchdog says

IRS should expand free online tax preparation after ‘incredible success’ of test, say Sen. Elizabeth Warren and more than 100 Democrats

The IRS will audit the use of corporate jets at dozens of companies. The tax collector wants to make sure “high-income groups don’t fly under the radar”.

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