IRS collects $1.3 billion from wealthy taxpayers since fall 2022

Since the fall of 2022, the IRS has intensified its efforts to collect unpaid taxes from wealthy individuals, resulting in the recovery of $1.3 billion. This initiative is part of a broader strategy supported by President Biden's climate, health care, and tax legislation aimed at enhancing tax enforcement. Treasury Secretary Janet Yellen highlighted that in 2019, the wealthiest one percent owed a significant portion of unpaid taxes, which placed a heavier burden on average taxpayers. The IRS has specifically targeted individuals with incomes exceeding $1 million and tax debts over $250,000. As a result, nearly 80% of the 1,600 millionaires identified for tax evasion have made payments, contributing to over $1.1 billion in collections. Additionally, a new initiative launched in February 2024 has already collected $172 million from 21,000 wealthy taxpayers who had not filed tax returns since 2017. Despite these successes, there are ongoing political debates regarding IRS funding. Republicans have proposed budget cuts for the agency, arguing against the increased spending on tax enforcement. Former President Donald Trump has also indicated plans to reduce federal agency budgets, including the IRS, which has been criticized for its hiring of new agents to pursue tax evasion. In an effort to modernize tax filing, the IRS introduced a Direct File program for individuals with simple tax situations, allowing them to submit returns directly. This initiative has already resulted in over $90 million in refunds for participants, and more states are expected to join the program for the upcoming tax season, enhancing accessibility for taxpayers.