The IRS says it plans to continue its pursuit of “high-income individuals evading taxes,” as agency officials announced that they’ve recovered $38 million from delinquency cases against wealthy taxpayers in the past few months because of a boost in funding.
“The IRS is now taking swift and aggressive action to close this gap.
“In recent months, our Criminal Investigation team has closed a lengthy list of cases where wealthy taxpayers have been sentenced for tax evasion, money laundering, and filing false tax returns.
“Instead of paying taxes, these evaders spent money owed to the government on gambling at casinos, vacations, and the purchase of luxury goods. For example, in one case alone, the person was ordered to pay more than $6 million in restitution.”
The IRS says it has closed about 175 delinquent tax cases for millionaires in the past few months, although the agency has not specified as to what constitutes a millionaire. The Epoch Times has reached out to IRS requesting a definition.
“This is just the start. We will continue to go after delinquent millionaires as we ramp up enforcement capabilities through the IRA,” the agency stated.
The agency has been under scrutiny for allegedly focusing on taxing lower-income families rather than wealthier ones.
IRS Focuses on Low-Wage Earners
In a 2021 annual report (pdf) to Congress, National Taxpayer Advocate Erin M. Collins pointed out that in fiscal year 2019, more than half the taxpayers that IRS subjected to correspondence audits only had total positive incomes of less than $50,000.“These taxpayers often face particular challenges navigating the correspondence audit process,” the report reads.
TRAC pointed out that the IRS audits of millionaire taxpayers have fallen over the past decade. In 2012, 40,965 such taxpayers were audited by the IRS. By fiscal 2020, the number fell to 7,108.
Before passing the bill in August, an amendment was proposed by Sen. Mike Crapo (R-Idaho) stipulating that none of the $80 billion funds from the IRA set aside for the IRS could be used by the tax agency to audit taxpayers making less than $400,000 annually; all 50 Democrat senators voted against the amendment.
In a letter to then-IRS Commissioner Charles P. Rettig, whose term expired in November 2022, Treasury Secretary Janet Yellen wrote that the new funding “shall not be used to increase the share of small business or households below the $400,000 threshold that are audited relative to historical levels.”
However, since her directive isn’t in the bill, Yellen’s words don’t have the force of law.
Rep. Kevin Brady (R-Texas) estimated that the spending measure could potentially amount to 1.2 million new taxpayer audits each year, of which more than 710,000 would be Americans making $75,000 or less annually.