As the IRS enforces high-level tax compliance, millionaires with delinquent taxes have already paid $500 million to reach the IRS.
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On Friday, the IRS released new numbers on the amount of unpaid taxes paid by billionaire households since the 2022 upgrade increased the IRS' crackdown on tax delinquents and evaders among corporations and the ultra-wealthy.
IRS officials said they collected an additional $360 million from billionaire households that owed at least $250,000 in taxes. This follows the IRS announcement in October. $160 million in tax arrears It was collected from wealthy families.
This equates to a total of $520 million, which IRS Commissioner Danny Wuerfel said is a high initial return on investment for a multibillion-dollar inflow.
“We are seeing significant early signs that our increased surveillance…is having an immediate impact,” Werfel told reporters on Thursday. He also noted that the IRS is proceeding with new audits of corporations and well-funded partnerships.
However, the future of some of the funds that come with that hardline stance is uncertain.
The Inflation Control Act of 2022 authorized $80 billion to the IRS over 10 years. More than half of the funds were earmarked to revive flagging enforcement against corporations, partnerships and wealthy families.
Werfel and the Biden administration have promised not to increase household audit rates. Annual income is less than $400,000.
However, in a contract for cancellation debt limit the White House agreed with House Republican negotiators to: Redirect $20 billion elsewhere. As part of a possible new agreement to avert a partial government shutdown on January 19th. Accelerate recovery of that $20 billion.
Werfel said the $20 billion early recovery won't affect IRS upgrades or higher-level enforcement until the second half of the decade.
But that money is well spent on improving law enforcement and customer service, he said. “For this progress to continue, we must not only keep Inflation Control Act funding intact, but also maintain reliable and consistent annual spending on government agencies,” Werfel said Thursday.
There are long-term funding questions, but there are also questions that need answers sooner.
Income tax filing season begins January 29th Funded by the IRS. The government hit a wall on February 2nd without a new spending agreement. People will still be able to file 2023 income tax returns if it lapses, but Werfel noted that there has never been a government shutdown during tax filing season.
“A shutdown would be extremely disruptive,” he said, later adding that encountering it now would “increase the risk that we won't have as smooth a filing season as we had hoped.”
