The IRS said on Friday that it has recovered more than $1.3 billion from wealthy U.S. taxpayers by increasing its enforcement measures after the Inflation Reduction Act was passed.
Announced in a news release, the agency said in an update that it has recovered $172 million from 21,000 “wealthy taxpayers” who haven’t filed tax returns since 2017. That tax revenue was collected in the first six months of the initiative, it said.
The agency launched its initiative in February to go after certain wealthy taxpayers who hadn’t filed returns since 2017. The IRS said it had received third-party information—including from W-2 tax forms filed by others—that suggested those individuals have an income between $400,000 and $1 million or more, but didn’t file their returns.
In addition, about 80 percent of 1,600 millionaires who were targeted had delinquent tax debt and have now made a payment to the IRS, the tax agency said, adding that more than $1.1 billion has been recovered so far.
“This is an additional $100 million just since July, when Treasury and IRS announced reaching the $1 billion milestone,” the IRS said.
Meanwhile, the agency collected another “$38 million from more than 175 high-income, high-wealth individuals last year” after it started its enforcement, it said. Since then, the IRS has expanded its efforts to the aforementioned 1,600 millionaires, it said.
With the enforcement on wealthy taxpayers who haven’t paid since 2017, the agency’s efforts against the 1,600 other individuals, and its actions targeting 175 individuals last year, more than $1.3 billion has been collected.
Since the the fall of 2023, the IRS—by using funds from the Inflation Reduction Act—started targeting “high-income, high-wealth individuals who have failed to pay recognized tax debt” in a more broad sense, according to the agency. Dozens of senior IRS employees are assigned to such cases, according to the statement. The IRS was not able to collect the tax revenue “due to a lack of resources,” it said.
In August 2022, Congress passed the Inflation Reduction Act, giving the IRS the ability to audit high-income earners.
“These efforts matter,” Treasury Secretary Janet Yellen said at a speech in Texas on Friday, according to a transcript released by the Treasury Department. “They are advancing fairness. It’s not right that everyday Americans pay taxes while struggling to make ends meet but some of the wealthiest in this country have been able to evade payment.”
The investments in data, technology, and enforcement may generate some $850 billion in additional tax revenue over the coming decade, she said.
“This is money our government needs to protect our national security, provide Social Security and health care, and invest in our nation’s infrastructure, among many other priorities,” Yellen said.
Republicans had opposed the boost in IRS funding, saying that the agency would carry out more audits on middle-class taxpayers. Democrats instead said that the new funding is needed to target high-wealth individuals who are cheating on their taxes.
In June, House Financial Services and General Government Subcommittee Chairman Dave Joyce (R-Ohio) and other Republicans said they were proposing IRS funding cuts that would rein in “wasteful spending” and help to “prevent agencies like the IRS from unfairly targeting hardworking Americans.”
Earlier this year, the IRS said that with the new funding, it was planning to ramp up the number of audits but would be focused on people earning more than $400,000 per year.
“At the same time, the IRS continues to emphasize the agency will not increase audit rates for small businesses and taxpayers making under $400,000, and those rates remain at historically low levels,” the agency said in May.
