The IRS announced that it will target thousands of uber-wealthy tax cheats in the coming months and trick them into amassing hundreds of millions of dollars.
The federal authority said it’s planned to aggressively hunt down 1,600 millionaires and 75 large business partnerships who routinely “cut corners” on their taxes.
“If you pay your taxes on time, you may find it particularly frustrating to see wealthy taxpayers not doing so,” said IRS Commissioner Daniel Werfel.
Each of the millionaire tax evaders targeted by the IRS owes at least $250,000 in back taxes each, while the partnerships have assets averaging about $10 billion.
The IRS plans to hire an undisclosed number of tax agents to focus on high-stakes debt collection cases so the new initiative can begin in October of this year.
The crackdown represents the next phase of an aggressive prosecution that the Biden administration launched earlier this summer – in July, the IRS announced it had recovered $38 million in delinquent taxes from more than 175 high-income taxpayers in just a few months has collected.
According to Werfel, the initiative is being driven by a massive increase in federal funding from the Inflation Reduction Act, which aims to generate tax revenue for the country.
The agency is also complemented by artificial intelligence tools that can detect tax fraud tactics that may not be visible to the human eye.
“New tools are helping us see patterns and trends we couldn’t see before, giving us more confidence in where to look and where big partnerships are shielding income,” Werfel said.
A team of academic economists and IRS researchers found in 2021 that the top 1% of U.S. earners report no more than 20% of their income to the IRS.
With additional support and funding, the IRS will continue to hunt down larger and wealthier tax evaders in the coming years.
As part of the initiative, the agency promised that citizens earning less than $400,000 per year would not see an increase in their exam rates.
“This new compliance push delivers on the Inflation Reduction Act’s promise to ensure that the IRS holds our wealthiest filers accountable for paying the full amount of their debts,” Werfel said.
“The years of underfunding before the Inflation Reduction Act resulted in the lowest review rate of wealthy applicants in our history.”
With post wires