The Internal Revenue Service is stepping up its campaign against wealthy tax fraud, sending out letters this week in response to more than 125,000 cases involving high-income earners who have not filed returns since 2017. ing.
Tax authorities said the cases collectively involved hundreds of millions of dollars in unpaid taxes. More than 25,000 compliance letters will be sent to delinquent taxpayers with incomes of $1 million or more.
“At a time when millions of hard-working people are paying their taxes correctly, we cannot tolerate high-income earners neglecting their basic civic duty to file their tax returns,” the IRS Commissioner said. said Danny Warfel. he said in a statement released Thursday.
“The IRS is taking this action to address this most basic illegal activity, which involves many tax evaders.”
IRS ramps up audits of wealthy tax evaders
The effort marks the latest move in a federal campaign to increase tax audits of high-income Americans and businesses, backed by billions of dollars in new funding from Congress.
President Joe Biden added nearly $80 billion in new IRS funding to the Inflation Control Act of 2022. The money will be used to collect unpaid taxes from the wealthy and improve the agency’s customer service and office technology.
Congressional Republicans are chipping away at the windfall, claiming the money will be used to harass ordinary taxpayers and small business owners.
The IRS has promised not to increase audit rates for taxpayers earning less than $400,000 a year, which roughly corresponds to the top 2% of earners. All, or nearly all, of the new compliance letters will go to people who earn at least that amount.
The latest efforts include cases in which the IRS received third-party information, such as W-2 and 1099 forms, suggesting that a taxpayer received large amounts of income but failed to file returns. Masu.
Tax authorities will begin sending out compliance letters this week at a rate of at least 20,000 per week, starting with the highest income categories of filers.
Email is a form of compliance alert, formally known as CP59 announcement. Some taxpayers receive multiple letters indicating failure to file returns for multiple years.
A CP59 notice is issued when the IRS has no record of a taxpayer filing a return in the past. Instruct non-filers to file immediately or explain why they are not required to file a return.
Together, the 125,000 cases involved more than $100 billion in financial activity, according to the IRS.
“At conservative estimates, the IRS believes these cases involve hundreds of millions of dollars in unpaid taxes,” the agency said in a release. Ironically, “at the same time, some non-filers may actually be owed a refund.”
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What should I do if I receive a compliance letter from the IRS?
The agency said those who receive compliance notices should take immediate action to avoid heavier penalties and stronger enforcement actions.
The flurry of letters is one of several new IRS actions targeting suspected tax fraud.Earlier this month, authorities announced they would begin an audit. private jet Research their use and associated tax credits.
