HomeFinanceU.S. Department of the...

U.S. Department of the Treasury, IRS Announce $1 Billion in Past-Due Taxes Collected from Millionaires

U.S. Department of the Treasury, IRS Announce  Billion in Past-Due Taxes Collected from Millionaires

Major Milestone Reached Under Initiative Launched Last Year Under Inflation Reduction Act

WASHINGTON – Today, the U.S. Department of the Treasury and Internal Revenue Service (IRS) announced that a new initiative to collect past-due tax debt from high-income, high-wealth individuals has reached a major milestone, with more than $1 billion recovered. This new initiative was made possible by resources from President Biden’s Inflation Reduction Act. 

The IRS in 2023 launched a new initiative to pursue high-income, high-wealth individuals who have failed to pay recognized tax debt, with dozens of senior employees assigned to these cases. This campaign is concentrated among taxpayers with more than $1 million in income and more than $250,000 in recognized tax debt.

“President Biden’s Inflation Reduction Act is increasing tax fairness and ensuring that all wealthy taxpayers pay the taxes they owe, just like working families do,” said U.S. Secretary of the Treasury Janet L. Yellen. “A new initiative to collect overdue taxes from a small group of wealthy taxpayers is already a major success, yielding more than $1 billion in revenue so far.”

In an initial success, the IRS announced last year that it had collected $38 million from more than 175 high-income, high-wealth individuals. The IRS then expanded this effort last fall to 1,600 additional high-income, high-wealth individuals. The IRS has assigned more than 1,500 of these 1,600 cases to senior employees, with more than $1 billion collected to date.

Prior to President Biden’s Inflation Reduction Act, more than a decade of budget cuts prevented the IRS from keeping pace with increasing complexity and ensuring that wealthy taxpayers, large corporations, and complex partnerships pay taxes owed under current law. The effort to pursue high-income, high-wealth individuals who have failed to pay past-due tax debt is one of several initiatives the IRS has launched to improve tax fairness and reduce the deficit. In the past two years, the IRS has launched: 

  • A new initiative to crack down on abuse of corporate jets for personal travel. 
  • A campaign to collect taxes owed by 125,000 high-income, high-wealth earners who have not filed taxes in years. 
  • Audits of 76 of the largest partnerships with average assets of $10 billion that represent a cross section of industries including hedge funds, real estate investment partnerships, publicly traded partnerships, and large law firms.
  • Audits of the 60 largest corporate taxpayers, with average assets of $24 billion.  
  • And a new regulatory initiative to close a major tax loophole exploited by large, complex partnerships that could raise more than $50 billion in revenue over 10 years. 

In addition to enhancing tax fairness, these initiatives will narrow the gap between taxes owed and taxes paid, reducing the deficit. New Treasury and IRS analysis shows these investments in high-end enforcement, technology, and data resulting in $851 billion in additional revenue over the next decade if the investments in the Inflation Reduction Act are continued as President Biden has proposed. 

These enforcement initiatives are consistent with Secretary Yellen’s commitment to not increase audit rates relative to current levels for Americans making less than $400,000 a year. 

###

Official news published at https://home.treasury.gov/news/press-releases/jy2458

Most Popular